Income Statement
FY 2007
Sales 1,750,000
Labor and Materials 1,150,000
Factory Overhead 370,000
Selling and General Expenses 260,000
Profit Before Taxes (30,000)
Taxes 0
Profit (30,000)
Balance Sheet
Dec 2007
Assets
Cash 25,000
Accounts Receivables 350,000
Inventories 90,000
Plant and Equipment 190,000
Total Assets 655,000
Liabilities
Account Payable 255,000
Notes Payable 90,000
Long-term Debt 10,000
Stockholder’s Equity
Capital Stock 25,000
Retained Earnings 275,000
Total Liabilities & Equity 655,000
Using Income Statement and Balance Sheet figures for 2007, calculate the liquidity ratios and leverage ratios for the company. Show your work. Report and comment on the health of the company as evidenced by each of the following:
Quick Ratio
Current Ratio
Total Debt to Net Worth and
Current Debt to Net Worth.