Problem - You are interested in investing in Copy Free Company, and you have obtained the balance sheets for the company for the past 2 years.
Copy Free Company Balance Sheet At June 30, 2009 and 2008
2009 2008
Current assets:
Cash $ 195,000 $ 95,500
Accounts Receivable, net 213,000 115,000
Inventory 250,000 135,000
Prepaid rent 13,000 15,000
Total current assets 671,000 360,500
Equipment, net 290,000 275,000
Total assets $ 961,000 $ 635,500
Total current liabilities 305,000 225,000
Long-term liabilities 220,000 115,000
Total liabilities 525,000 340,000
Common stockholders' equity 110,000 85,000
Retained earnings 326,000 210,500
Total liabilities and stockholders' equity $ 961,000 $ 635,500
The following amounts were reported on the income statement for the year ended June 30, 2009.
Sales $325,000
Cost of goods sold 220,000
Interest expense 9,000
Net income 75,000
Required: Compute as many of the financial statement ratios you have studied as possible with the information provided for Copy Free Company. Some ratios can be computed for both years and others can be computed for only 1 year.