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Use the information from the income statement and balance sheet to compute the following ratios.

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Question

Question 1;Use the information from the income statement and balance sheet to compute the following ratios.;ASSETS LIABILITIES;Cash 25 Accounts Payable 78;Accounts receivable 100 Notes Payable 34;Inventories 125 Accrued liabilities 30;Total current assets 250 Total Current liabilities 142;Gross Plant & Equipment 300 Long-term debt 140;Accumulated depreciation 100 Total liabilities 282;New Plant & Equipment 200 Common stock 50;Land 50 Paid-in capital 100;Total Fixed Assets 250 Retained earnings 68;Total Assets 500 Total equity 218;Total liabilities & equity 500;Net revenues 700;Cost of goods sold 450;Gross profit 250;Operating expenses;General and administrative 95;Selling and marketing 56;Depreciation 25;Earnings Before Interest and Taxes 74;Interest 14;Income before Taxes 60;Income taxes (40%) 24;Net Income 36;a. Current ratio;b. Quick ratio;c. Inventory Turnover;d. Receivables Turnover;e. Debt ratio;f. Times interest earned;g. Gross profit margin;h. Operating profit margin;i. Net profit margin;j. Return on equity;question 2;For each of the following ratios indicate whether the firm?s ratios are good or poor as compared to industry averages.;Answer;Inventory Turnover Company 5 Industry 7;Receivables Turnover Company 20 Industry 33;Times Interest Earned Company 3 Industry 7;Quick Ratio Company 1 Industry 3;Return on Assets Company 6.1% Industry 8.5%

 

Paper#25692 | Written in 18-Jul-2015

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