Finance Assignment
calvinzhao
33.doc|
NAME: |
|
SCORE: |
|
|
|
|
2018 |
2019 |
|
CURRENT ASSETS: |
|
|
|
|
|
Cash |
$ 26,950.00 |
$ 31,500.00 |
|
|
Marketable Securities |
$ 85,400.00 |
$ 60,500.00 |
|
|
Accounts Receivable |
$ 34,000.00 |
$ 45,600.00 |
|
|
Notes Receivable |
$ 44,000.00 |
$ 57,450.00 |
|
|
Inventories |
$ 62,400.00 |
$ 58,900.00 |
|
|
Total Current Assets: |
$ 252,750.00 |
$ 253,950.00 |
|
|
|
|
|
|
FIXED ASSETS: |
$ 1,086,450.00 |
$1,188,300.00 |
|
|
TOTAL ASSETS |
$ 1,339,200.00 |
$1,442,250.00 |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
$ 107,700.00 |
$ 78,250.00 |
|
|
LONG TERM LIABILITIES: |
$ 681,500.00 |
$ 644,000.00 |
|
|
|
|
$ 789,200.00 |
$ 722,250.00 |
|
|
|
|
|
|
OWNERS EQUITY: |
$ 550,000.00 |
$ 720,000.00 |
|
|
TOTAL LIABILITIES & EQUITY |
$ 1,339,200.00 |
$1,442,250.00 |
|
|
|
|
|
|
|
CONDENSED PROFIT & LOSS |
2018 |
2019 |
|
|
Net Income Before Interest & Tax |
$ 280,000.00 |
||
|
Income After Interest And Tax |
$ 200,000.00 |
||
|
|
|
|
|
|
ADDITIONAL INFORMATION |
|||
|
Shares Outstanding |
400,000.00 |
500,000.00 |
|
|
Market Price Per Share |
$ 1.45 |
USING ABOVE INFORMATION, CALCULATE THE FOLLOWING RATIOS FOR 2019:
1. Current Ratio: __________ 2. Quick Ratio:_________
3. TA:TL: __________________ 4. TL:TA: ______________
5. TL:TE: __________________
|
NAME: |
|
SCORE: |
|
|
|
2018 |
2019 |
|
CURRENT ASSETS: |
|
|
|
Cash |
$ 13,450.00 |
$ 15,680.00 |
|
Marketable Securities |
$ 95,000.00 |
$ 95,000.00 |
|
Accounts Receivable |
$ 22,400.00 |
$ 29,720.00 |
|
Inventories |
$ 32,000.00 |
$ 45,000.00 |
|
Total Current Assets: |
$ 162,850.00 |
$ 185,400.00 |
|
|
|
|
|
FIXED ASSETS: |
|
|
|
Property |
$ 150,000.00 |
$ 150,000.00 |
|
Equipment |
$ 61,850.00 |
$ 85,000.00 |
|
Furniture |
$ 58,000.00 |
$ 65,000.00 |
|
Building |
$ 120,000.00 |
$ 120,000.00 |
|
Less Accumulated Depreciation |
$ (45,000.00) |
$ (52,000.00) |
|
Total Net Fixed Assets: |
$ 344,850.00 |
$ 368,000.00 |
|
TOTAL ASSETS |
$ 507,700.00 |
$ 553,400.00 |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts Payable |
$ 12,400.00 |
$ 14,800.00 |
|
Short Term Loan |
$ 40,000.00 |
$ 40,000.00 |
|
Accrued Expense Payable |
$ 8,500.00 |
$ 8,000.00 |
|
Total Current Liabilities |
$ 60,900.00 |
$ 62,800.00 |
|
|
|
|
|
LONG TERM LIABILITIES: |
|
|
|
Mortgage |
$ 85,000.00 |
$ 85,000.00 |
|
Long Term Loan |
$ 60,000.00 |
$ 80,000.00 |
|
Total Long Term Liabilities |
$ 145,000.00 |
$ 165,000.00 |
|
Total Liabilities: |
$ 205,900.00 |
$ 227,800.00 |
|
|
|
|
|
OWNERS EQUITY: |
|
|
|
Common Stock |
$ 240,900.00 |
$ 262,800.00 |
|
Retained Earnings |
$ 60,900.00 |
$ 62,800.00 |
|
TOTAL EQUITY: |
$ 301,800.00 |
$ 325,600.00 |
|
|
|
|
|
TOTAL LIABILITIES & EQUITY |
$ 507,700.00 |
$ 553,400.00 |
|
INCOME STATEMENT: |
2018 |
2019 |
|
Sales |
$ 550,000.00 |
$ 680,000.00 |
|
Less Operating Expenses |
$(134,000.00) |
$(214,400.00) |
|
Operating Income |
$ 416,000.00 |
$ 465,600.00 |
|
Less Indirect Expenses |
$(245,800.00) |
$(268,000.00) |
|
Earning Before Interest & Tax |
$ 170,200.00 |
$ 197,600.00 |
|
Interest Expense |
$ (35,000.00) |
$ (42,000.00) |
|
Income Taxes |
$ (68,000.00) |
$ (80,000.00) |
|
Earning After Interest & Tax |
$ 67,200.00 |
$ 75,600.00 |
|
|
|
|
|
ADDITIONAL INFORMATION |
|
|
|
Shares Outstanding |
90,000.00 |
10,000.00 |
|
Cost Of Goods Sold |
|
$ 165,000.00 |
|
Market Price Per Share |
$ 1.45 |
USING THE INFORMATION GIVEN, CALCULATE THE FOLLOWING RATIOS FOR 2019:
1. Current Ratio: __________ 2. Quick Ratio:_________
3. TA:TL: __________________ 4. TL:TA: ______________
5. TL:TE: __________________ 6. ROA: ________________
7. EPS; ____________________ 8. ROI: ________________
9. PE Ratio:________________ 10. ART:________________
11. ACP: ___________________
|
NAME: |
|
SCORE: |
|
|
|
2017 |
2018 |
2019 |
|
CURRENT RATIO |
1.40 |
1.60 |
2.10 |
|
INVENTORY TURNOVER |
37.00 |
31.00 |
28.00 |
|
ACCOUNTS RECEIVABLE TURNOVER |
28.00 |
25.00 |
18.00 |
|
RETURN ON ASSETS |
6.00% |
7.20% |
7.80% |
|
DEBT TO EQUITY |
2.50 |
2.20 |
1.90 |
|
RETURN ON EQUITY |
7.50% |
8.80% |
9.50% |
|
REVENUE |
$ 845,000 |
$ 862,000 |
$ 856,000 |
a. Is the restaurant becoming more efficient in the collection of its account receivable?
b. Over the years has more or less money been invested in inventory?
c. During the period, has the liquidity of the business improved?
d. From the stockholders' point of view, has the profitability of the business operation improved?
e. If the business wishes to use a long-term loan to expand business, would it be easier to find a lender now than it would have been three years ago?
f. If the business wishes to seek equity financing, would it be easier now than three years ago?
g. Has the working capital increased from three years ago?
|
NAME: |
|
SCORE: |
|
|
|
2017 |
2018 |
2019 |
|
CURRENT RATIO |
2.40 |
2.60 |
2.50 |
|
INVENTORY TURNOVER |
38.00 |
38.00 |
40.00 |
|
ACCOUNTS RECEIVABLE TURNOVER |
28.00 |
20.00 |
15.00 |
|
NET RETURN ON ASSETS |
10.00% |
14.00% |
17.00% |
|
DEBT TO EQUITY |
3.50 |
2.20 |
1.00 |
|
RETURN ON EQUITY |
9.50% |
9.80% |
6.50% |
|
REVENUE |
$ 850,000 |
$ 880,000 |
$ 860,000 |
|
EARNING PER SHARE |
$ 2.75 |
$ 2.63 |
$ 1.30 |
a. Is the restaurant becoming more efficient in the collection of its account receivable?
b. Over the years has more or less money been invested in inventory?
c. Has the working capital increased since 2017?
d. Did the company issue new stocks to increase equity in 2019?
e. If the business wishes to use a long-term loan to expand business, would it be easier to find a lender now than it would have been 3 years ago?
|
NAME: |
|
SCORE: |
|
Ratio Analysis
Carolyn's Café
Carolyn owns Carolyn's Cafe, and her restaurant is experiencing the effects of the downturn in the economy. Carolyn is trying to analyze her restaurant performance for 2019; however, she needs your help. The following are her income statements for 2018 and 2019.
|
Income Statement |
|
2018 |
2019 |
|
Sales |
|
1,440,000 |
782,400 |
|
Cost of Sales |
|
484,000 |
352,000 |
|
Gross Profit |
|
956,000 |
430,400 |
|
Operating Expenses |
|
417,000 |
310,784 |
|
Depreciation Expense |
|
15,000 |
10,000 |
|
Operating Income |
|
524,000 |
109,616 |
|
Interest Expenses |
|
125,000 |
152,616 |
|
Income Before Income Taxes |
|
399,000 |
(43,000) |
|
Taxes (40%) |
|
159,600 |
0 |
|
Net Income |
|
239,400 |
(43,000) |
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
Common Stock Price |
|
$30.00 |
$12.00 |
|
Earnings Per share |
|
$4.78 |
$-1.57 |
Below are the 2018 and 2019 Balance Sheets for Carolyn's Cafe.
|
Account |
2018 |
|
2019 |
|
Cash |
175,000 |
|
168,000 |
|
Receivables |
620,000 |
|
600,000 |
|
Marketable Securities |
760,000 |
|
775,000 |
|
Inventories |
21,000 |
|
23,000 |
|
Total Current Assets |
1,576,000 |
|
1,566,000 |
|
|
|
|
|
|
Fixed Assets |
750,000 |
|
600,000 |
|
Less Accum. Depreciation |
262,500 |
|
210,000 |
|
Net Fixed Assets |
487,500 |
|
390,000 |
|
Total Assets |
2,063,500 |
|
1,956,000 |
|
|
|
|
|
|
Accounts Payable |
282,500 |
|
292,000 |
|
Notes Payable |
150,000 |
|
318,000 |
|
Accruals |
45,000 |
|
67,000 |
|
Total Current Liabilities |
477,500 |
|
677,000 |
|
|
|
|
|
|
Long-Term Debt |
360,000 |
|
550,000 |
|
Common Stock ($2.00 par) |
100,200 |
|
54,800 |
|
Paid in Capital |
901,800 |
|
493,200 |
|
Retained Earnings |
224,000 |
|
181,000 |
|
Total Liab. and Owners’ Equity |
2,063,500 |
|
1,956,000 |
|
Total Sources and Uses |
|
|
|
1. Help Carolyn analyze the health of her cafe by completing the ratio analysis below. Fill in the blanks provided. (Round as in Carolyn’s 2018.)
|
|
|
Carolyn’s 2018 |
Carolyn’s 2019 |
|
Current Ratio |
|
3.30 times |
|
|
Quick Ratio |
|
3.26 times |
|
|
Solvency Ratio |
|
2.46 times |
|
|
Debt to Assets |
|
40.59% |
|
|
Inventory Turnover |
(Assume inventory was $21,000 in 2017) |
23.05 times |
|
|
Asset Turnover |
(Assume TA was 2,063,500 in 2017) |
0.70 times |
|
|
Return on Assets |
(Assume TA was 2,063,500 in 2017) |
11.60% |
|
|
Return on Equity |
(Assume TE in 2017 was the same in 2018) |
19.53% |
|
|
Profit Margin |
|
16.63% |
|
|
Price per Earnings Ratio |
|
6.28 times |
|
