Question

In: Accounting

balance sheet 12/31/2014 12/31/2015 Assets Current Assets Cash in bank $     57,000 $    65,000 Accounts receivable         75,00

balance sheet

12/31/2014

12/31/2015

Assets

Current Assets

Cash in bank

$     57,000

$    65,000

Accounts receivable

        75,000

       82,000

Inventory

        66,000

       75,000

Prepaid expenses

          6,000

         8,000

Total Current Assets

$   204,000

$   230,000

Fixed Assets

Machinery & equipment

$     25,200

$    18,000

Total Fixed Assets (net of depreciation)

$     25,200

$    18,000

TOTAL Assets

$   229,200

$   248,000

Liabilities and Equity

Current Liabilities

Accounts payable

$     89,000

$    90,000

Total Current Liabilities

$     89,000

$    90,000

Long-term Debt

Bank loans payable

$     62,000

$    50,000

Total Long-term Debt

$     62,000

$    50,000

Total Liabilities

$   151,000

$   140,000

Owners' Equity

        78,200

     108,000

Total Liabilities & Equity

$   229,200

$   248,000

Task 1: Liquidity Analysis

Calculate the following ratios for Gerup Garments Inc. Write 100 words describing the company’s liquidity condition:

  • current ratio
  • quick ratio
  • accounts receivable turnover
  • days sales outstanding
  • inventory turnover
  • average days to sell inventory

Type your response here:

Task 2: Solvency Analysis

Calculate the following ratios for Raymond Garments Inc. Write 100 words describing the company’s solvency condition:

  • debt-to-assets ratio
  • debt-to-equity ratio
  • interest coverage ratio
  • plant assets to long-term liabilities

Task 3: Profitability Analysis

Calculate the following ratios for Raymond Garments Inc. Write 100 words describing the company’s profitability condition:

  • net margin ratio
  • asset turnover ratio
  • return on investment
  • return on equity
  • Task 4: Financial Analysis

Using your ratios, write 200 words describing the company’s overall financial condition.

Solutions

Expert Solution

Ratio calculation for the year 2015

Liquidity Analysis-

Current Ratio = Current Assets / Current Liabilities

Current Ratio: 230000 / 90000 = 2.55

Quick Ratio = (Cash in bank + Account receivable) / Current Liabilities

Quick Ratio = (65000 + 82000) / 90000

Quick ratio = 1.63

Account receivable turnover: Net credit sales is not given in the question to calculate A/R turnover ratio.

  • days sales outstanding
  • inventory turnover
  • average days to sell inventory

Cannot be calculated as sales is not given. Please provide Sales figure.

Liquidity Position- Company's liquidity position is very good, company has higher current ratio than 2, company has liquid assets in the form of cash and receivables that can be easily converted into cash.

Solvency Analysis-

Debt to asset ratio = Total Liabilities / Total Assets

Debt to asset ratio: 140000 / 248000 = .56

Debt to equity ratio = Total liabilities / Total Equity

Debt to equity ratio: 140000 / 108000 = 1.29

Solvency Position- Company's solvency position is average, it has lower debt to asset ratio but little higher debt to equity ratio. Higher debt to equity ratio is not good for company, it should be below 1, higher ratio indicates heavy amount of liabilities, liabilities bring interest burden and obligation.

Task 3: Profitability Analysis-

Net Margin Ratio = (Net profit margin / Net sales) * 100

Note: For profitability ratios, I need Net profit margin that is available in the Income statement and not in the balance sheet so please provide Income statement for calculating profitability ratios.

Many left ratios cannot be calculated due to non availability of some figures

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable,...
The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable, net 18,000 Inventory 50,000 Total current assets 1,568,000 Equipment 90,000 Goodwill 20,000 Total assets $1,678,000 Liabilities and shareholders' equity Shareholders' equity: Common stock, 20,000 shares outstanding, $1 par 20,000 Additional paid-in capital 280,000 Retained earnings 1,378,000 Total shareholders' equity 1,678,000 Total liabilities and shareholders' equity 1,678,000 Note that all additional paid-in capital (APIC) sub accounts (e.g., APIC-options and APIC-treasury stock), if any, are tracked...
The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable,...
The Balance Sheet of the Illini as of 12/31/20X0: Assets Current Assets: Cash 1,500,000 Accounts receivable, net 18,000 Inventory 50,000 Total current assets 1,568,000 Equipment 90,000 Goodwill 20,000 Total assets $1,678,000 Liabilities and shareholders' equity Shareholders' equity: Common stock, 20,000 shares outstanding, $1 par 20,000 Additional paid-in capital 280,000 Retained earnings 1,378,000 Total shareholders' equity 1,678,000 Total liabilities and shareholders' equity 1,678,000 Note that all additional paid-in capital (APIC) sub accounts (e.g., APIC-options and APIC-treasury stock), if any, are tracked...
T. P. Jarmon Company Balance Sheet for 12/31/2014 and 12/31/2015 Assets 2014 2015 Cash $15,000 $14,000...
T. P. Jarmon Company Balance Sheet for 12/31/2014 and 12/31/2015 Assets 2014 2015 Cash $15,000 $14,000 Marketable securities 6,000 6,200 Accounts receivable 42,000 33,000 Inventory 51,000 83,300 Prepaid rent 1,200 1,100 Total current assets $115,200 $137,600 Net plant and equipment $286,000 $270,200 Total assets $401,200 $407,800 Liabilities and Equity 2014 2015 Accounts payable $48,000 $57,000 Accruals 6,000 5,200 Notes payable 15,000 12,900 Total current liabilities $69,000 $75,100 Long-term debt $160,000 $150,500 Common stockholders' equity $172,200 $182,200 Total liabilities and equity...
Illini Company, Inc. Balance Sheet as of 12/31/20X0 Assets Current Assets: Cash $1,500,000 Accounts receivable, net...
Illini Company, Inc. Balance Sheet as of 12/31/20X0 Assets Current Assets: Cash $1,500,000 Accounts receivable, net               18,000 Inventory               50,000 Total current assets         1,568,000 Equipment               90,000 Goodwill               20,000 Total assets $1,678,000 Liabilities and shareholders' equity Shareholders' equity: Common stock, 20,000 shares outstanding, $1 par $20,000 Additional paid-in capital            280,000 Retained earnings         1,378,000 Total shareholders' equity         1,678,000 Total liabilities and shareholders' equity $1,678,000 Note that all additional paid-in capital (APIC) sub accounts (e.g., APIC-options...
Balance Sheet Assets: 12/31/19 Current Assets: Cash $3,000.00 Accounts Receivable 1,250.00 Prepaid Expenses $100.00 Total Current...
Balance Sheet Assets: 12/31/19 Current Assets: Cash $3,000.00 Accounts Receivable 1,250.00 Prepaid Expenses $100.00 Total Current Assets $4,350.00 Non-Current Assets: Property, Plant, and Equipment Land $10,000.00 Buildings 25,000.00 Equipment 15,000.00 Accumulated Depreciation $(12,000.00) Total Property, Plant, and Equipment $38,000.00 Total Assets $42,350.00 Liabilities: Current Liabilities Accounts Payable $100.00 Accrued Expense 150.00 Salary and Wages Payable - Notes Payable - Unearned Revenue $1,500.00 Total Liabilities $1,750.00 Shareholder's Equity Common Stock - $1 par (See Note Below) $15,000.00 Retained Earnings $25,600.00 Total...
Dec. 31, 2015 Dec. 31, 2014 Assets Cash and cash equivalents 129,852 593,175 Accounts receivable, net...
Dec. 31, 2015 Dec. 31, 2014 Assets Cash and cash equivalents 129,852 593,175 Accounts receivable, net 433,638 279,835 Inventories 783,031 536,714 Prepaid expenses and other current assets 152,242 87,177 Deferred income taxes 52,498 Total current assets 1,498,763 1,549,399 Property and equipment, net 538,531 305,564 Goodwill 585,181 123,256 Intangible assets, net 75,686 26,230 Deferred income taxes 92,157 33,570 Other long-term assets 78,582 57,064 Total assets 2,868,900 2,095,083 Liabilities and Stockholders Equity Accounts payable 200,460 210,432 Accrued expenses 192,935 147,681 Current maturities...
Dec. 31, 2015 Dec. 31, 2014 Assets Cash and cash equivalents 129,852 593,175 Accounts receivable, net...
Dec. 31, 2015 Dec. 31, 2014 Assets Cash and cash equivalents 129,852 593,175 Accounts receivable, net 433,638 279,835 Inventories 783,031 536,714 Prepaid expenses and other current assets 152,242 87,177 Deferred income taxes 52,498 Total current assets 1,498,763 1,549,399 Property and equipment, net 538,531 305,564 Goodwill 585,181 123,256 Intangible assets, net 75,686 26,230 Deferred income taxes 92,157 33,570 Other long-term assets 78,582 57,064 Total assets 2,868,900 2,095,083 Liabilities and Stockholders Equity Accounts payable 200,460 210,432 Accrued expenses 192,935 147,681 Current maturities...
Balance​ Sheet: ​3/31/2016 ​12/31/2015 ​9/30/2015 ​6/30/2015 Assets Current Assets Cash and cash equivalents 293 300 255...
Balance​ Sheet: ​3/31/2016 ​12/31/2015 ​9/30/2015 ​6/30/2015 Assets Current Assets Cash and cash equivalents 293 300 255 232 Net receivables 401 362 385 460 Inventory 374 342 437 306 Other current assets 60 43 53 45 Total Current Assets ​1,128 ​1,047 ​1,130 ​1,043 ​Long-term investments 128 97 long dash— 200 ​Property, plant, and equipment 979 991 995 ​1,052 Goodwill 744 748 736 742 Other assets 777 830830 903903 797 Total Assets ​3,756 3 comma 7133,713 3 comma 7643,764 ​3,834 Liabilities Current...
Devin E Corporation Balance Sheet As of December 31, 2015 2014 Assets: Cash & Cash Equivalents...
Devin E Corporation Balance Sheet As of December 31, 2015 2014 Assets: Cash & Cash Equivalents $41,900 $25,000 Accounts Receivable 24,000 6,250 Inventory 30,000 36,000      Current Assets 95,900 67,250 Land 25,000 10,000 Equipment 42,000 38,500 Less: Accumulated Depreciation (14,000) (7,000) 53,000 41,500 Total Assets 148,900 108,750 Liabilities: Accounts Payable 17,500 22,500 Accrued Salaries Payable 5,500 8,000 Rent Expense Payable 2,200 1,000 Income Tax Payable 6,900 4,000 Current Liabilities 32,100 35,500 Long-term notes payable 50,000 30,000 Total Liabilities 82,100 65,500...
ARID Company Income Statement FYE 12/31 Assets 2015 2014 Current assets Cash $       45,000 $       23,000...
ARID Company Income Statement FYE 12/31 Assets 2015 2014 Current assets Cash $       45,000 $       23,000 Short-term investments 36,000 18,000 Accounts receivable 94,000 89,000 Inventory 82,000 68,000 Total current assets 257,000 198,000 Plant assets (net) 550,000 560,000 Total assets $807,000 $758,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable 140,000 120,000 Income taxes payable 35,000 38,000 Total current liabilities 175,000 158,000 Long-term liabilities Bonds payable 160,000 170,000 Total liabilities 335,000 328,000 Stockholders' equity Common stock ($5 par) 195,000 185,000 Retained...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT