Given the profit loss (income statement) and balance sheet for Sam's Sandwich Delivery (Table 4-8), answer the following:
a. Calculate the following ratios: current, quick, accounts receivable turnover, fixed asset turnover.
b. Using the inventory figure on the balance sheet as average inventory, calculate the inventory turnover ratio.
c. Calculate the debt-to-equity ratio, debt-to-total asset ratio, and operating profit margin ratio.
d. Perform a vertical analysis of the income statement.
e. Perform a vertical analysis of the balance sheet.
f. Based on your analysis, would you consider investing in Sam's Sandwich Delivery?
| Table 4-8 Financial Statements for Sam's Sandwich Delivery |
|
| Profit Loss (Income Statement) for Six Months Ending 06-30-2013 |
|
|
|
|
|
|
| Revenues |
|
|
|
|
|
Retail Sales |
|
$68,283 |
|
|
|
Wholesale Sales |
|
104,417 |
|
|
| Total Revenues |
|
|
$172,700 |
|
| Cost of Sales |
|
52,067 |
|
|
| Gross Profit |
|
|
$120,633 |
|
|
Total Operating Expenses |
111,117 |
|
|
| Operating Profit |
|
|
$ 9,516 |
|
| Other Income/Expenses |
|
|
|
|
|
Interest Income |
|
41 |
|
|
|
Interest Expense |
|
(651) |
|
|
|
Depreciation-Store Equipment |
(292) |
|
|
| Total Other Income/Expenses |
|
(902) |
|
| Net Profit |
|
|
|
$ 8,614 |
|
|
|
|
|
|
| Balance Sheet as of 06-30-2013 |
|
|
|
|
|
|
| Assets |
|
|
|
|
| Current Assets |
|
|
|
|
|
Change Fund |
|
|
$ 569 |
|
|
Cash in Bank-Checking |
|
|
8,612 |
|
|
Cash in Bank-Savings |
|
|
9,622 |
|
|
Accounts Receivable |
|
|
6,843 |
|
|
Inventories |
|
|
2,607 |
|
| Total Current Assets |
|
|
|
$ 28,253 |
|
|
|
|
|
|
| Fixed Assets |
|
|
|
|
|
Furniture and Fixtures |
|
4,296 |
|
|
|
Less: Accum Depreciation |
4,110 |
186 |
|
|
Equipment |
|
68,293 |
|
|
|
Less: Accum Depreciation |
67,725 |
568 |
|
|
Transportation Equipment |
31,168 |
|
|
|
Less: Accum Depreciation |
11,571 |
19,597 |
|
| Total Fixed Assets |
|
|
|
$ 20,351 |
|
|
|
|
|
|
| Total Assets |
|
|
|
$ 48,604 |
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
Accounts Payable Trade |
|
|
6,208 |
|
|
Accrued Payroll Taxes |
|
|
3,464 |
|
|
Accrued Sales Taxes |
|
|
987 |
|
| Total Current Liabilities |
|
|
|
$ 10,659 |
| Long-Term Liabilities |
|
|
|
|
|
Auto Loans Payable |
|
|
18,626 |
|
|
Total Long-Term Liabilities |
|
|
$ 18,626 |
|
Total Liabilities |
|
|
|
$ 29,285 |
| Stockholder's Equity |
|
|
|
|
|
Common Stock |
|
83,081 |
|
|
|
Retained Earnings |
|
(72,376) |
|
|
|
Net Profit/Loss |
|
8,614 |
|
|
| Total Equity |
|
|
|
19,319 |
|
|
|
|
|
|
| Total Liabilities and Equity |
|
|
|
$ 48,604 |
|
|
|
|
|
|