1. Balance Sheet -------- From the following balance sheet accounts,
a. Construct a balance sheet for 2013 and 2014.
b. List all the working capital accounts.
c. Find the net working capital for the years ending 2013 and 2014.
d. Calculate the change in net working capital for the year 2014.
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Balance Sheet Accounts of Roman Corporation
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Account
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Balance 12/31/2013
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Balance 12/31/2014
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Accumulated depreciation
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$2,020
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$2,670
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Accounts payable
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$1,800
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$2,060
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Accounts receivable
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$2,480
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$2,690
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Cash
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$1,300
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$1,090
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Common stock
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$4,990
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$4,990
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Inventory
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$5,800
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$6,030
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Long-term debt
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$7,800
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$8,200
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Plant, property, and equipment
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$8,400
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$9,200
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Retained earnings
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$1,370
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$1,090
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Research two companies' financial statements from the following industries:
• Airline
• Oil/gas
Analyze below table in Financial Management: Core Concepts, Ch. 14: "Financial Ratios: Industry Averages." (Table is below)
Prepare the following ratios for the two sets of financial statements in Microsoft Excel:
• Price to Earnings
• Gross Margin
Table Financial Ratios: Industry Averages
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Ratio or Account
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Airlines
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Auto
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Pharmaceuticals
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Oil and Gas
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Retail
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Computer Hardware
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P/E ratio
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22.44
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7.38
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87.80
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5.39
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34.29
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20.97
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Gross margin
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19.28%
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21.77%
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59.54%
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47.47%
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24.51%
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43.54%
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Profit margin
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0.75%
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3.79%
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14.85%
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12.14%
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2.94%
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17.08%
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Current ratio
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0.92
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0.32
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2.77
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1.11
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1.23
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2.86
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Debt-to-equity ratio
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1.69
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0.34
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0.11
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0.19
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0.81
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0.19
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Return on assets
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0.70%
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3.57%
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9.40%
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12.11%
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6.31%
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18.22%
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Return on equity
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0.77%
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10.17%
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14.71%
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20.10%
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16.82%
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26.24%
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