finance homework
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Finance_WK3HW_revised.docxBUSN 5200
Homework Assignment for Week 3:
For Week 3, please complete the following for Joe’s Fly-By-Night Oil Company, whose latest income statement and balance sheet are shown below:
INCOME STATEMENT, 2018
BALANCE SHEET, as of Dec 31, 2018
Sales
$10,000
ASSETS
Cost of goods sold
4,000
Cash
$5,000
Gross profit
$6,000
Accounts receivable
3,000
S, G & A expenses
3,000
Inventory
17,000
EBIT
$3,000
Current assets
$25,000
Interest
$200
Equipment (gross)
27,000
Before-tax earnings
$2,800
Less Accum Depreciation
(12,000)
Taxes
1,000
Equipment (net)
$15,000
Net income
$1,800
Total assets
$40,000
LIABILITIES AND EQUITY
EPS
$1.80
Accounts payable
$17,000
Current liabilities
$17,000
Dividends
$600
Long-term debt
$3,000
Addition to retained earnings
$1,200
Total liabilities
$20,000
Common stock (1,000 shares)
$7,000
Retained earnings
$13,000
Total equity
$20,000
Total liabilities & Equity
$40,000
Joe's Fly-by-Night Oil
• Prepare a graph of sales and net income for the years 2015 – 2018. For the purposes of this exercise, assume the following historical sales and net income figures for Joe’s Fly-By-Night Oil:
Year Sales Net Income
2015 $8,200 $1,500
2016 $8,000 $1,400
2017 $9,000 $1,600
2018 $10,000 $1,800
Comment on the results displayed on the graph.
• Prepare a pie chart of Joe’s Fly-By-Night Oil’s expense distribution for 2018 and comment on the results displayed.
• Prepare a pie chart of Joe’s Fly-By-Night Oil’s asset distribution for Dec 31, 2018 and comment on the results displayed.
• Prepare a pie chart of Joe’s Fly-By-Night Oil’s capital structure for Dec 31, 2018 and comment on the results displayed.
Note: Be sure to comment on each of the four graphs. The numbers mean little
without your explanatory comments.
