Professor Eulid - 3 assignments

FN3440: Week 2 Financial Ratios, Financial Statements, and Cash Flows

Analysis 2.1

Review of Financial Statements

1

Prepare a balance sheet and income statement for the Warner Company from the following scrambled list of

items.

Depreciation expense $66,000

Cash 225,000

Long-term debt 334,000

Sales 573,000

Accounts payable 102,000

General and administrative expense 79,000

Buildings and equipment 895,000

Notes payable 75,000

Accounts receivable 153,000

Interest expense 4,750

Accrued expenses 7,900

Common stock 289,000

Cost of goods sold 297,000

Inventory 99,300

Taxes 50,500

Accumulated depreciation 263,000

Prepaid expenses 14,500

Taxes payable 53,000

Retained earnings 262,900

a. What is the firm’s net working capital and debt ratio?

b. Complete a common-sized income statement and a common-sized balance sheet. Interpret your findings.

Source: Keown, A. J., Martin, J. D., & Petty, J. W. (2011). Foundations of finance: The logic and practice of financial

management (7th ed.). Boston, MA: Pearson Education.

Submission Requirements:

 Answer each problem in detail with an appropriate rationale.

 Submit your answer in an MSWord or Excel file, showing step-by-step solutions to all calculations.

FN3440: Week 2 Financial Ratios, Financial Statements, and Cash Flows

Analysis 2.1

Review of Financial Statements

2

 Use Arial 12 point font double spaced and utilize APA formatting in a minimum one-page document.

Evaluation Criteria:

Click here to view the grading rubric for this analysis.