Textbook Assignment 1 CAN YOU HELP FAV
MANSHARK
320_summer_c_prob_1.docxBUSI 320 Comprehensive Problem 1 Version C
Use the following information to answer the questions on page 2 below:
(note: all sales are credit sales)
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Income Stmt info: |
2013 |
2014 |
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Sales |
$ 1,050,000 |
$ 1,102,500 |
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less Cost of Goods Sold: |
325,000 |
351,000 |
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Gross Profit |
725,000 |
751,500 |
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Operating Expenses |
575,000 |
609,500 |
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Earnings before Interest & Taxes |
150,000 |
142,000 |
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Interest exp |
25,000 |
30,000 |
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earnings before Taxes |
125,000 |
112,000 |
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Taxes |
50,000 |
44,800 |
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Net Income |
$ 75,000 |
$ 67,200 |
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Balance Sheet info: |
12/31/2013 |
12/31/2014 |
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Cash |
60,000 |
$ 57,000 |
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Accounts Receivable |
80,000 |
$ 80,800 |
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Inventory |
110,000 |
$ 121,000 |
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Total Current Assets |
$ 250,000 |
$ 258,800 |
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Fixed Assets (Net) |
$ 300,000 |
$ 318,000 |
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Total Assets |
$ 550,000 |
$ 576,800 |
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Current Liabilities |
$ 130,000 |
$ 149,500 |
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Long Term Liabilities |
$ 150,000 |
$ 140,000 |
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Total Liabilities |
$ 280,000 |
$ 289,500 |
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Stockholder's Equity |
$ 270,000 |
$ 287,300 |
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Total Liab & Equity: |
$ 550,000 |
$ 576,800 |
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Compute each of the following ratios for 2013 and 2014 and |
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indicate whether each ratio was getting "better" or "worse" from 2013 to 2014 |
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and was "good" or "bad" compared to the Industry Avg in 2014 |
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(round all numbers to 2 digits past the decimal place) |
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2013 |
2014 |
Getting Better or Getting Worse? |
2014 Industry Avg |
"Good" or "Bad" compared to Industry Avg |
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Profit Margin |
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0.11 |
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Current Ratio |
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1.90 |
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Quick Ratio |
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1.12 |
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Return on Assets |
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.26 |
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Debt to Assets |
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.55 |
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Receivables turnover |
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18.00 |
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Avg. collection period* |
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21.20 |
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Inventory Turnover** |
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8.25 |
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Return on Equity |
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0.25 |
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Times Interest Earned |
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8.15 |
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*Assume a 360 day year |
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**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text |
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(the one the text indicates many credit reporting agencies generally use) |
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Textbook Assignment 1 Financial Statement Analysis Grading Rubric SCORING CHART
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Category |
Exceptional 3 Points |
Competent 2 Points |
Poor 0 Points |
Points Earned |
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Current Ratio |
Calculated the correct amount for Current Ratio. |
Calculated the amount for Current Ratio within 10% of correct amount. |
Did not calculate the correct amount for current ratio. |
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Quick Ratio |
Calculated the correct amount for Quick Ratio |
Calculated the amount for Quick Ratio within 10% of correct amount. |
Did not calculate the correct amount for Quick Ratio. |
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Average Collection Period |
Calculated the correct amount for Average Collection Period. |
Calculated the amount for Average Collection Period within 10% of correct amount. |
Did not calculate the correct amount for Average Collection Period |
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Accounts Receivable Turnover |
Calculated the correct amount for Accounts Receivable Turnover |
Calculated the amount for Accounts Receivable Turnover within 10% of correct amount. |
Did not calculate the correct amount for Accounts Receivable Turnover. |
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Debt Ratio |
Calculated the correct amount for Debt Ratio |
Calculated the amount for Debt Ratio within 10% of correct amount. |
Did not calculate the correct amount for Debt Ratio |
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Return on Assets |
Calculated the correct amount for Return on Assets |
Calculated the amount for Return on Assets s within 10% of correct amount. |
Did not calculate the correct amount for Return on Assets |
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Times interest earned ratio |
Calculated the correct amount for Times interest earned ratio |
Calculated the amount for Times interest earned ratio within 10% of correct amount. |
Did not calculate the correct amount for Times interest earned ratio. |
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Return on Common Equity |
Calculated the correct amount for Return on Common Equity |
Calculated the amount for Return on Common Equity within 10% of correct amount. |
Did not calculate the correct amount for Return on Common Equity |
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Fixed Asset Turnover Ratio |
Calculated the correct amount for Fixed Asset Turnover Ratio. |
Calculated the amount for Fixed Asset Turnover Ratio within 10% of correct amount. |
Did not calculate the correct amount for Fixed Asset Turnover Ratio |
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Total Asset Turnover |
Calculated the correct amount for Total Asset Turnover. |
Calculated the amount for Total Asset Turnover within 10% of correct amount. |
Did not calculate the correct amount for Total Asset Turnover |
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Total: Instructor’s Comments: |
*Note that if you make a valid attempt at answering the question(s), partial points may be awarded at the discretion of the professor. Hence, be sure to show all work, as incorrect answers without any work shown will receive 0 credit.
