In: Finance
Complete the balance sheet and sales information using the
following financial data:
Total assets turnover: 1.3x
Days sales outstanding: 36 daysa
Inventory turnover ratio: 7x
Fixed assets turnover: 3.5x
Current ratio: 2.3x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =
15%
aCalculation is based on a 365-day year. Do not round
intermediate calculations. Round your answer to the nearest
cent.
Balance Sheet | ||||
Cash | $ | Current liabilities | $ | |
Accounts receivable | Long-term debt | 45,000 | ||
Inventories | Common stock | |||
Fixed assets | Retained earnings | 90,000 | ||
Total assets | $300,000 | Total liabilities and equity | $ | |
Sales | $ | Cost of goods sold | $ |
Ans :
1. Total assets turnover ratio = net sales / Total assets
1.3 = Net sales / Total assets
Net Sales = Total assets * 1.3
Net sales = $ 300,000 * 1.3
= $ 390,000
2. Gross Profit margin on sales = 15 %
(Sales - Cost of goods sold) / Sales = 15 %
(390000 - Cost of goods sold) / 390000 = 15 %
390000 - Cost of goods sold = 390000*15%
Cost of goods sold = 390000 - 390000 *15%
Cost of goods sold = 390000 - 58500
COst of goods sold = $ 331,500
3. INventory Turnover ratio = 7
Cost of goods sold / Inventory = 7
$ 331500 / 7 = Inventory
Inventory = $ 47357.14
4. Fixed asset turnover ratio = 3.5
Fixed assets turnover = Net sales / Fixed assets
3.5 = 390000 / Fixed assets
Fixed assets = 390000 / 3.5
Fixed assets = $ 111428.57
5. Days sales outstanding = accounts receivalbe / Net Credit Sales * 365 days
36 = Accounts receivable / 390000 * 365
Accounts receivable = 36 * 390000 / 365
= $ 38,465.75
6. Current assets = Total assets - Fixed assets
= $ 300,000 - $ 111,428.57
= $ 188,571.43
Current assets = Cash + Inventory + Accounts receivable
$ 188571.43 = Cash + $ 47,357.14 + $ 38,465.75
Cash = $ 102,748.54
7. Current ratio = Current assets / Current liabilities
2.3 = $ 188571.43 / Current liabilities
Current liabilities = $ 188571.43 / 2.3
= $ 81,987.58
8. Total assets = Total liabilities and equity
= 300,000
Common stock = Total liabilities and equity - Current liablities - Long term debt - retained earnings
= $ 300,000 - $ 81,987.58 - $ 45,000 - $ 90,000
= $ 83,012.42
Balance sheet | |||
Cash | 102748.54 | ||
Accounts receivable | 38465.75 | Current liabilities | 81987.58 |
Inventories | 47357.14 | Long term debt | 45000 |
Total current assets | 188571.43 | Common stock | 83012.42 |
Fixed assets | 111428.57 | Retianed earnings | 90000 |
Total assets | 300000 | Total liabilities and equity | 300000 |
Sales | 390000 | Cost of goods sold | 331500 |