| BUSI 320 Comprehensive Problem 1 Version FALL |
| Use the following information to answer the questions below: |
| | note: all sales are credit sales |
| | Income Stmt info: | 2016 | 2017 |
| | Sales | $ 975,000 | $ 1,072,500 |
| | less Cost of Goods Sold: | 325,000 | 346,125 |
| | Gross Profit | 650,000 | 726,375 |
| | Operating Expenses | 575,000 | 609,500 |
| | Earnings before Interest & Taxes | 75,000 | 116,875 |
| | Interest exp | 25,000 | 31,000 |
| | earnings before Taxes | 50,000 | 85,875 |
| | Taxes | 20,000 | 34,350 |
| | Net Income | $ 30,000 | $ 51,525 |
| | Balance Sheet info: | 12/31/16 | 12/31/17 |
| | Cash | 60,000 | $ 63,600 |
| | Accounts Receivable | 80,000 | $ 84,000 |
| | Inventory | 110,000 | $ 126,500 |
| | Total Current Assets | $ 250,000 | $ 274,100 |
| | Fixed Assets (Net) | $ 300,000 | $ 312,000 |
| | Total Assets | $ 550,000 | $ 586,100 |
| | Current Liabilities | $ 130,000 | $ 149,500 |
| | Long Term Liabilities | $ 150,000 | $ 170,000 |
| | Total Liabilities | $ 280,000 | $ 319,500 |
| | Stockholder's Equity | $ 270,000 | $ 266,600 |
| | Total Liab & Equity: | $ 550,000 | $ 586,100 |
| | Compute each of the following ratios for 2016 and 2017 and |
| | indicate whether each ratio was getting "better" or "worse" from 2016 to 2017 |
| | and whether the 2017 ratio was "good" or "bad" compared to the Industry Avg |
| | (round all numbers to 2 digits past the decimal place) |
| | | 2016 | 2017 | Getting Better or Getting Worse? | 2017 Industry Avg | "Good" or "Bad" compared to Industry Avg |
| | Profit Margin | | | | 0.09 |
| | Current Ratio | | | | 1.80 |
| | Quick Ratio | | | | 1.12 |
| | Return on Assets | | | | 0.18 |
| | Debt to Assets | | | | 0.60 |
| | Receivables turnover | | | | 12.00 |
| | Avg. collection period* | | | | 22.10 |
| | Inventory Turnover** | | | | 8.25 |
| | Return on Equity | | | | 0.16 |
| | Times Interest Earned | | | | 8.15 |
| | *Assume a 360 day year |
| | **Inventory Turnover can be computed 2 different ways. Use the formula listed in the text |
| | (the one the text indicates many credit reporting agencies generally use) |
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BUSI320ComprehensiveProblem1FALL2018inEXCEL.xlsx
