Question

Get hold of financial statements of any company or project. Perform financial analysis – see measures of profitability, solvency and efficiency

Answer 1

A	B	C	D	E	F
2
3		Using the following financial data, the ratios can be calculated as follows:
4		Balance Sheet
5		Cash		$295,500
6		Accounts Receivable (net)		$875,000
7		Inventory		$437,500
8		Current Assets		$1,608,000
9		Property and Equipment (net)		$240,450
10		Other Assets		$0
11		Total Assets		$1,848,450
12		Liabilities and Owner's Equity
13		Accounts Payable		$306,250
14		Short term notes payable		$88,185
15		Other Current Liabilities		$18,200
16		Current Liabilities		$412,635
17		Long term Debt		$495,800
18		Total Liabilities		$908,435
19		Capital Stock ($10 Par Value)		$700,000
20		Retained Earnings		$240,015
21		Total Shareholders' Equity		$940,015
22		Total Liabilities and shareholders' equity		$1,848,450
23		Income Statement
24		Sales Revenue		$1,750,000
25		Cost of goods sold		$1,225,000
26		Gross Profit		$525,000
27		SG &A Expenses		$262,500
28		Fixed Expense		$43,750
29		Depreciation Expense		$80,000
30		Operating Income (EBIT)		$138,750
31		Interest Expense		$56,800
32		Taxable Income		$81,950
33		Tax Expense		$24,585
34		Net Income		$57,365
35
36
37		Liquidity Ratios		Row and Bust
38		Current Ratio	=Current Asset / Current Liabilities	3.90	=E8/E16
39		Quick Ratio	=(Current Assets - Inventories)/Current Liabilities	2.84	=(E8-E7)/E16
40		Efficiency Ratio
41		Inventory turnover	=Cost of goods old / Average Inventory	2.80	=E25/E7
42		Receivable turnover	=Credit Sales / Average Receivables	2.00	=E24/E6
43		Average Collection Period	=360 / Receivable turnover	180	=360 / E42
44		Fixed Asset turnover	=Sales / Fixed Assets	7.28	=E24/E9
45		Total asset turnover	=Sales / Total Assets	0.95	=E24/E11
46		Leverage Ratios
47		Total debt ratios	=Total Liabilities / Total Asset	0.49	=E18/E11
48		Long term debt ratio	=Long term debt / Total asset	0.27	=E17/E11
49		Debt to Equity	=Total Liabilities / Total Equity	0.966404791	=E18/E21
50		LTD to Equity	= LTD / Equity	0.527438392	=E17/E21
51		Coverage Ratios
52		Times interest earned	=EBIT / Interest expense	2.44278169	=E30/E31
53		Profitability Ratios
54		Gross Profit Margin	=Gross Profit / Sales	30.00%	=E26/E24
55		Operating Profit Margin	=EBIT / Sales	7.93%	=E30/E24
56		Net Profit Margin	=Net Income / Sales	3.28%	=E34/E24
57		Return on Assets	=Net Income / Averege Total Assets	3.10%	=E34/E11
58		Return on Equity	=Net Income / Average Total Shareholders' Equity	6.10%	=E34/E21
59