| Problems 1 and 2 |
| BALANCE SHEET | | 2015 | | | | | INSTRUCTIONS: Analyze the firm's performance from both time-series and cross-sectional points of view using the key financial ratios provided.
PROVIDE YOUR WRITTEN ANALYSIS IN THIS COLUMN. |
| Assets | | |
| Cash and Equivalents | | $ 237,500.00 |
| Accounts Receivable | | $ 592,500.00 |
| Inventory | | $ 607,500.00 |
| Total Current Assets | | $ 1,437,500.00 |
| Gross Fixed Assets | $ 1,250,000.00 |
| Less Accumulated Depreciation | $ 187,500.00 |
| Net Fixed Assets | | $ 1,062,000.00 |
| Total Assets | | $ 2,500,000.00 |
| Liabilities and Equity |
| Current Liabilities |
| Accounts Payable | | $ 222,500.00 |
| Notes Payable | | $ 422,500.00 |
| Accruals | | $ 217,500.00 |
| Total Current Liabilities | | $ 862,500.00 |
| Long Term Debt | | $ 470,000.00 |
| Total Liabilities | | $ 1,332,500.00 |
| Stockholder's Equity |
| Common Stock | | $ 637,500.00 |
| Retained Earnings | | $ 530,000.00 |
| Total Stockholders Equity | | $ 1,167,500.00 |
| Total Liabilities & Equity | | $ 2,500,000.00 |
| INCOME STATEMENT |
| Sales Revenue | | $ 3,360,000.00 |
| Cost of Sales | | $ 2,724,960.00 |
| Gross Profits | | $ 635,040.00 |
| |
| Less: Operating Expenses |
| Selling Expense | $ 251,200.00 |
| General S&A | $ 163,200.00 |
| Depreciation | $ 48,000.00 |
| Total Operating Expenses | | $ 462,400.00 |
| Total Operating Profit | | $ 172,640.00 |
| Less: Interest Expense | | $ 31,200.00 |
| Net Profits Before Taxes | | $ 141,440.00 |
| Less Taxes (40%) | | $ 56,576.00 |
| Net Profits After Taxes | | $ 84,864.00 |
| LIQUIDITY RATIOS | | 2013 | 2014 | 2015 | Industry Average |
| Current Ratio | | 1.5 | 1.7 | | 1.6 |
| Quick Ratio | | 0.9 | 1 | | 0.9 |
| Operating Cash Flow | | n/a | n/a |
| ASSET MANAGEMENT RATIOS | | 2013 | 2014 | 2015 | Industry Average |
| Inventory Turnover | | 6 | 5 | | 8.4 |
| Average Collection Period | | 40 | 50 | | 40 |
| Fixed Asset Turnover | | n/a | n/a |
| Total Asset Turnover | | 1.5 | 1.5 | | 1.75 |
| DEBT MANAGEMENT RATIOS | | 2013 | 2014 | 2015 | Industry Average |
| Debt Ratio | | 60% | 56% | | 50% |
| Times Interest Earned | | 2.5 | 3.5 | | 4 |
| PROFITABILITY RATIOS | | 2013 | 2014 | 2015 | Industry Average |
| Gross Profit Margin | | 20% | 19.70% | | 20% |
| Operating Profit Margin | | 4.70% | 4.80% | | 6% |
| Net Profit Margin | | 2% | 2.30% | | 3% |
| Return on Investment | | 3.00% | 3.50% | | 5.25% |
| Return on Equity | | 7.50% | 7.95% | | 10.50% |
| End of worksheet |
qwrtll111
a2.xlsx
