2.

a.

You are given the following balance sheet and income statement of ABC Ltd.

Assets	2012	2011	Liabilities and equities	2012	2011
Cash	90	40	Accounts payable	80	20
Account receivable	295	355	Notes payable	90	16
Inventories	715	415	Wage payable	140	130
Net fixed assets	900	870	Bank loan	720	620
			Common stock	150	130
			Retained earnings	820	764
Total assets	2000	1680	Total liabilities and equities	2000	1680

	2012
Net sales	3000.0
Less: Operating cost excluding depreciation	2616.2
Less: Depreciation	100.0
EBIT	283.8
Less: interest	88.0
EBT	195.8
Tax (40%)	78.3
Net income	117.5
Dividend	61.5

Required: prepare a cash flow statement and statement of retained earnings for 2012.

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b.

Data for Beximco Pharma and its industry are as follow:

Beximco Pharma

: Balance Sheet as of December 31, 2019

Cash 95,000 Accounts payable 60,000

Accounts receivable 110,000 Notes payable 68,000

Inventories 115,000 Accruals 27,000

Net fixed Assets 230,000 Long term debt 145,000

Common Equity 250,000

Total assets $550,000 Total liabilities and equity 550,000

Additional data:

1. Sales were $ 800,000

2. Net income $10,500

Ratio Industry Average

Current ratio 2.0X

DSO 35 days

Debt ratio 60%

Inventory turnover 6.0X

Total assets turnover 3.0X

Profit margin on sales 1.2%

Return on total assets 3.6%

Return on common equity 9.0%

Required:

1. Calculate Beximco Pharmas indicated ratios and comment on its financial strength.

2. Construct an extended Du Pont equation for Beximco Pharma and industry.

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