Fill out the following balance sheet and conduct a ratio analysis. Discuss your reasons for granting...

Fill out the following balance sheet and conduct a ratio analysis. Discuss your reasons for granting or denying an additional loan.

Assets		Liabilities
Current Assets	$40,000	Current Liabilities	$60,000
Non-current Assets		Non-current Liabilities	$50,000
		Total Liabilities

		Owner Equity
*Total Assets*		*Liabilities plus Equity*	*$280,000*

Expert Solution

Answer :

Non-Current Asset = 280000 - 40000 ==> 240000

Owner Equity = 280000 - 60000 - 50000 ==> 170000

Ratio Analysis for additional loan with given information :

1. Debt-Equity Ratio = Non current liablity / Owner Equity

= 50000 / 170000 = 0.29

2. Current Ratio = Current Asset / Current Liablity

= 40000 / 60000 = 0.67

3. Debt- Asset Ratio = Non current liablity / Total Asset

= 50000 / 280000 = 0.18

So with the ratio calculated above, company can get additional loan. As its debt-equity & debt-asset is under acceptable limit.

jeff jeffy answered 2 years ago

P13-3A Perform ratio analysis, and discuss change in financial position and operating results Condensed balance sheet...

P13-3A Perform ratio analysis, and discuss change in financial position and operating results Condensed balance sheet and income statement data for Jergan Corporation are presented here. JERGAN CORPORATION Balance Sheet December 31 2017 2016 2015 Cash $30,000 $20,000 $18,000 Accounts receivable (net) 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 Investments 55,000 70,000 45,000 Plant and equipment (net) 500,000 370,000 358,000 $725,000 $600,000 $533,000 Current liabilities $85,000 $80,000 $70,000 Long-term debt 145,000 85,000 50,000 Common stock, $10 par 320,000...

(Ratio analysis) The balance sheet and income statement for the A. Thiel Mfg. Company are given...

(Ratio analysis) The balance sheet and income statement for the A. Thiel Mfg. Company are given in the popup window: Calculate the following ratios: a. Current ratio b. Operating return on assets c. Times interest earned d. Debt ratio e. Inventory turnover f. Average collection period g. Total asset turnover h. Fixed asset turnover i. Operating profit margin j. Return on equity Cash $ 500 Accounts receivable 2,000 Inventories 1,000 Current assets $ 3,500 Net fixed assets 4,500 Total assets ...

Balance sheet. Fill in the missing information on the annual balance sheet statements for Barron Pizza,...

Balance sheet. Fill in the missing information on the annual balance sheet statements for Barron Pizza, Inc., Complete the table below for the assets part of the balance sheet: (Round to the nearest thousand dollars.) Barron Pizza, Inc. Balance Sheet as of December 31, 2012, 2013, and 2014 ($ in thousands) ASSETS 2014 2013 2012 Current Assets Cash $ 7,085 $ 9,487 $ 17,554 Accounts receivable $ 26,683 $ Answer $ 25,892 Inventory $ Answer $ 16,359 $ 12,591 Other...

Ratio Analysis: Balance Sheet (Millions of $)       Assets   Liabilities and Equity   Cash and securities $  1,554.0...

Ratio Analysis: Balance Sheet (Millions of $)       Assets   Liabilities and Equity   Cash and securities $  1,554.0 Accounts payable $  7,980.0 Accounts receivable 9660.00 Notes payable 5880.00 Inventories   13,440.0 Accruals     4,620.0 Total current assets 24654.00 Total current liabilities 18480.00 Net plant and equipment   17,346.0 Long-term bonds   10,920.0 Total assets 42000.00 Total debt 29400.00     Common stock 3360.00     Retained earnings     9,240.0     Total common equity 12600.00     Total liabilities and equity 42000.00 Income Statement (Millions of $)   Other data:   Sales 58800.00 Shares outstanding (millions) 175.00...

Balance Sheet - which of the following is incorrect? A. We can discuss the balance sheet...

Balance Sheet - which of the following is incorrect? A. We can discuss the balance sheet items in terms of whether they are operating or nonoperating. B. A classified balance sheet highlights the differences between operating and nonoperating categories of assets and liabilities. C. The balance sheet represents the accounting equation of assets = liabilities + owners' equity. D. A classified balance sheet highlights current assets, long-term assets, current liabilities, long-term liabilities and owners' equity.

Discuss the differences between horizontal, vertical and ratio analysis? What are three major reasons to hold...

Discuss the differences between horizontal, vertical and ratio analysis? What are three major reasons to hold cash in an organization?

3. Problem 3-11 (Balance Sheet Analysis) Balance Sheet Analysis Complete the balance sheet and sales information in...

3. Problem 3-11 (Balance Sheet Analysis) 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: 1.7 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30% Total liabilities-to-assets ratio: 40% Quick ratio: 0.90 Days' sales outstanding (based on 365-day year): 36.5 days Inventory turnover ratio: 3.25 Do not round intermediate calculations. Round your answers to the nearest whole dollar. Partial...

Using the following information, fill in the balance sheet below, and then answer questions 6 -...

Using the following information, fill in the balance sheet below, and then answer questions 6 - 10 Green Co. began operation on January 1, 2011. On January 1, 2011, the company purchased $9,500 of Equipment. Green has not purchased any additional equipment since this initial purchase, nor have they sold any equipment. This equipment is being depreciated on a straight-line basis to a $500 salvage value over an estimated depreciable life of 10 years. The following is a list of...

Fill in the blanks in the following Income Statement and Balance Sheet for Screven Industries. Assume...

Fill in the blanks in the following Income Statement and Balance Sheet for Screven Industries. Assume that there are 360 days in a year and that Credit Sales are 75% of total sales. Net Income is $1,200,000 Cash $750,000 Current Debt ________ Acct. Rec. _________ L-T Debt ________ Inventory _________ Total Debt ________ T. Current Assets _________ Stockholders’ Equity ________ Net Fixed Assets _________ Total Debt and Total Assets _________ Stockholders’ Equity ________ Total Asset Turnover 2.5 ACP 30 days...

Ratio Analysis of Comparative Financial Statements A comparative income statement and balance sheet of Miller Electronics...

Ratio Analysis of Comparative Financial Statements A comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are shown. Miller Electronics Corporation Comparative Income Statement For Years Ended December 31, 20-2 and 20-1 20-2 20-1 Net Sales (all on account) $646,120 $414,520 Cost of goods sold 384,590 253,000 Gross profit $261,530 $161,520 Administrative expenses $63,249 $41,647 Selling expenses 66,183 44,283 Total operating expenses $129,432 $85,930 Operating income $132,098 $75,590 Interest expense 1,316 1,222 Income before...

Question