1 BUSI 320 Comprehensive Problem 1 Version FALL 2. Use the following information to answer the questions below: 3 note: all sales are credit sales 4 Income Stmt info: 2019 2020 6 Sales $ 800,000 $ 880,000 7 less Cost of Goods Sold: 220,000 240,000 Gross Profit 580,000 640,000 9 Operating Expenses 480,000 505,000 10 Earnings before Interest & Taxes 100,000 135,000 11 25,000 25,000 12 earnings before Taxes 75,000 110,000 13 Taxes 25,000 30,000 14 Net Income $ 50,000 $ 80,000 15 Interest exp 16 17 18 19 Balance Sheet info: Cash Accounts Receivable Inventory Total Current Assets Fixed Assets (Net) Total Assets 12/31/2019 12/31/2020 60,000 $ 65,000 90,000 $ 95,000 110,000 $ 130,000 260,000 $ 290,000 300,000 $ 330,000 560,000 $ 620,000 20 $ $ 21 22 $ $ 23 24 25 26 27 Current Liabilities Long Term Liabilities Total Liabilities Stockholder's Equity Total Liab & Equity: 130,000 $ 170,000 $ 300,000 $ 260,000 $ 560,000 $ $ $ $ 140,000 200,000 340,000 280,000 620,000 28 29 30 31 32 33 Compute each of the following ratios for 2019 and 2020 and indicate whether each ratio was getting "better" or "worse" from 2019 to 2020 and whether the 2020 ratio was "good" or "bad" compared to the Industry Ave Sheet1 Sheet2 Sheets U B Compute each of the following ratios for 2019 and 2020 and indicate whether each ratio was getting "better" or "worse" from 2019 to 2020 and whether the 2020 ratio was "good" or "bad" compared to the Industry Avg (round all numbers to 2 digits past the decimal place) "Good" or "Bad" Getting compared Better or 2020 to Getting Industry Industry 2019 2020 Worse? Avg Avg Profit Margin 0.08 Current Ratio 1.80 Quick Ratio 1.12 9 Return on Assets 0.18 10 Debt to Assets 0.60 41 Receivables turnover 12.00 42 Avg. collection period 22.10 43 Inventory Turnover** 8.25 Return on Equity 0.16 45 Times Interest Earned 46 8.15 47 *Assume a 360 day year 48 **Inventory Turnover can be computed 2 different ways. Use the formula listed in the text 49 (the one the text indicates many credit reporting agencies generally use) 50 51 52 53 54 55 44