Question

Balance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:

Total assets turnover: 2.7

Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 21%

Total liabilities-to-assets ratio: 60%

Quick ratio: 1.15

Days sales outstanding (based on 365-day year): 33 days

Inventory turnover ratio: 5.0

Round your answers to the nearest whole dollar.

Partial Income Statement Information

Sales $

Cost of goods sold $

Balance Sheet

Cash $

Accounts payable $

Accounts receivable $

Long-term debt $ 50,000

Inventories $

Common stock $

Fixed assets $

Retained earnings $ 100,000

Total assets $ 400,000

Total liabilities and equity $

Answer 1

(1): Total Asset turnover = Sales / Total Assets

2.7 = Sales / 400000

Sales = $1080000

(2): Gross profit margin on sales = (Sales - Cost of goods sold) /Sales

.21 = (1080000 - COGS) / 1080000

226800 = 1080000-COGS

COGS = 1080000 - 226800

COGS = $853200

(3): Total liabilities to Asset = Total liabilities / Total Assets

.60 = Total liabilities / 400000

Total liabilities = 240000

(4): Current Liabilities = Total liabilities - Long term debt

Current Liabilities = 240000 - 50000

Current Liabilities = $190000

(5): Quick ratio = Liquid assets / Current liabilities

1.15 = Liquid assets / 190000

Liquid Assets = $218500

(6): Days sales outstanding = (Account receivables / Credit sales) 365

33 = (A/R / 1080000) 365

Account receivables = (33*1080000 / 365)

Account receivables = $97643.84

(7): Inventory turnover ratio = Cost of goods sold / Average inventory

5 = 853200 / Average inventory

Average inventory = $170640