Problem - Use the attached Balance Sheet and Income Statement to calculate the following ratios
- Current ratio
- Quick ratio
- Average Collection Period
- Inventory Turnover
- Fixed Asset Turnover
- Total Asset Turnover
- Debt Ratio
- Times Interest Earned
- Gross Profit Margin
- Operating Profit Margin
- Net Profit Margin
- Return on Total Assets
- Return on Equity
|
ABC Company Balance Sheet December 31, 2016
|
|
Assets
|
Liabilities
|
|
Cash
|
$125,000
|
Accounts Payable
|
$150,000
|
|
Accounts Receivable
|
275,000
|
Notes Payable
|
225,000
|
|
Inventory
|
325,000
|
Accrued Liabilities
|
100,000
|
|
Current Assets
|
725,000
|
Current Liabilities
|
475,000
|
|
|
|
|
|
Fixed Assets (net)
|
420,000
|
Long-term Debt
|
405,000
|
|
|
Total liabilities
|
$875,000
|
|
|
Equity
|
270,000
|
|
Total Assets
|
$1,145,000
|
Total Liabilities & Equity
|
$1,145,000
|
|
ABC Company Income Statement For the year ended December 31, 2017
|
|
Sales Revenue
|
$1,500,000
|
|
Cost of Goods Sold
|
1,200,000
|
|
Gross Profit
|
300,000
|
|
Operating Expenses
|
100,000
|
|
Operating Profit
|
200,000
|
|
Interest Expense
|
72,000
|
|
Earnings before Tax
|
128,000
|
|
Income Tax (40%)
|
51,200
|
|
Net Income
|
$ 76,800
|