Question

Use the income statement and balance sheet that you created on Wednesday, January 23, 2019 for Green Dating Service, Inc. to compute the ratios listed below.

Accounts Receivable          250,000                           Accounts Payable              260,000

Capital Surplus                  100,000                           Cash                                190,000

Common Stock                 300,000                           Costs                               640,000

Depreciation Expense          40,000                          Dividends                         97,500

Net Furniture & Fixtures     200,000                           Goodwill                          180,000

Interest Expense               50,000                          Inventory                         175,000      

Land                                305,000                           Line of Credit (used)          200,000      

Long Term Loan               340,000                           Retained Earnings                 ?             

Sales                               980,000                           Tax rate                              21%

Shares outstanding           15,000

Current Ratio:                                               Total Debt Ratio:

Earnings Per Share:                                       Payables Turnover:

Book Value Per Share:                                    Days Sales in Payables:

Answer 1

Use the income statement and balance sheet that you created on Wednesday, January 23, 2019 for Green Dating Service, Inc. to compute the ratios listed below:

Accounts Receivable 250,000 Accounts Payable 260,000
Capital Surplus 100,000 Cash 190,000
Common Stock 300,000 Costs 640,000
Depreciation Expense 40,000 Dividends 97,500
Net Furniture & Fixtures 200,000 Goodwill 180,000
Interest Expense 50,000 Inventory 175,000
Land 305,000 Line of Credit (used) 200,000
Long Term Loan 340,000 Retained Earnings ?   
Sales 980,000 Tax rate 21%
Shares outstanding 15,000

Current Ratio: Total Debt Ratio:
Earnings Per Share: Payables Turnover:
Book Value Per Share: Days Sales in Payables:

Current Ratio = Current Assets/Current Liabilities = $615,000/$460,000 = 1.34
Total Debt Ratio = Total Liabilities/Total Assets = $1,927,500/$2,380,000 = 0.81
Earnings Per Share = Net Income/Weighted Avg. O/s Shares = $197,500/15,000 = $13.17
Book Value Per Share = Total shareholders’ Equity / No. of Common Shares = 300000/15000 = $20
Days Sales in Payables = Total Purchases/Average Accounts Payables = $175,000/$260,000 = 0.673
Days Sales in Payables = [Accounts Payable / ( Cost of Sales / Number of days )] = $260,000/$640,000/365 (considering 1 year period of payables) = 148.5 Days