Question

In: Accounting

2017 2018 Accounts payable 800 740 Accounts receivable, net 1,850 2,150 Accruals 70 160 Cash ???...

2017

2018

Accounts payable

800

740

Accounts receivable, net

1,850

2,150

Accruals

70

160

Cash

???

???

Capital surplus

1,250

1,360

Common stock

1,020

1,210

Cost of goods sold

7,340

7,580

Depreciation expense

1,610

1,720

Interest expense

220

190

Inventory (end of year)

5,360

5,240

Long-term debt

6,310

6,450

Net fixed assets

8,240

9,120

Net sales

12,850

13,950

Notes payable

840

750

Operating expenses (excluding depreciation)

2,240

2,430

Retained earnings

8,300

8,460

Taxes

340

450

  1. This company’s operating profit margin (as a percent rounded to 1 decimal place) in 2017 was ________.

  2. The total asset turnover ratio for this company in 2017 = _______.

  3. ROE for 2018 is _____%.

  4. Cash flow from operating activities in 2018 is $ _______.

  5. Cash flow from investing activities in 2018 is $ _________.

  6. Cash flow from financing activities in 2018 is $ _________.

Solutions

Expert Solution

2017 2018
Net sales $    12,850.00 $    13,950.00
Cost of goods sold $      7,340.00 $      7,580.00
Gross Profit $      5,510.00 $      6,370.00
Depreciation expense $      1,610.00 $      1,720.00
Operating expenses (excluding depreciation) $      2,240.00 $      2,430.00
Operating Income $      1,660.00 $      2,220.00
Interest expense $          220.00 $          190.00
Income before tax $      1,440.00 $      2,030.00
Taxes $          340.00 $          450.00
Net Income $      1,100.00 $      1,580.00


Operating Profit Margin 2017 = Operating Profit / Sales x 100
= $1660 / $12850 x 100 = 12.92%

Asset turnover ratio for 2017 = Net Sales / Total Assets
= $12850 / $18590 = 0.69 times
Total Assets = Total liabilities + Total Equity = $8020 + $10570 = $18590

2017 2018
Liabilities
Accounts payable $          800.00 $          740.00
Accruals $            70.00 $          160.00
Long-term debt $      6,310.00 $      6,450.00
Notes payable $          840.00 $          750.00
Total Liabilities $      8,020.00 $      8,100.00
Equity
Capital surplus $      1,250.00 $      1,360.00
Common stock $      1,020.00 $      1,210.00
Retained earnings $      8,300.00 $      8,460.00
Total Equity $    10,570.00 $    11,030.00

ROE 2018 = Net Income / Average Equity x 100
= $1580 / $10800 x 100 = 14.63%
Average Equity = ($10570+11030) / 2 = $10800

Cash Flow Statement
Indirect Method
Cash Flow from Operating Activities
Net Income $     1,580.00
Adjustments
Depreciation $      1,720.00
Changes in Current Assets/ Current Liabilities
Increase in Accounts Receivable $        -300.00
Decrease in Inventory $          120.00
Decrease in Accounts Payable $           -60.00
Decrease in Notes Payable $           -90.00
Increase in Accruals $            90.00
Total Adjustments $     1,480.00
Cash from Operating Activities $      3,060.00
Cash flow from Investing Activities
Purchase of Equipment $   -2,600.00
Net cash used In investing activities $     -2,600.00
Cash flow from Financing Activities
Increase in Long term Debt $        140.00
Net cash used in financing activities $          140.00

Notes Payable has been considered as Current Liabilities

ekkarill92 answered 1 year ago
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