37 BUSI 320 Comprehensive Problem 1 Summer Use the following information to answer the questions below: 2 note: all sales are credit sales Income Stmt info: 2017 2018 Sales 1,100,0001,155,000 less Cost of Goods Sold: 325,000 351,000 Gross Proft Operating Expenses 775,000 804,000 575,000 609,500 10 Earnings before interest & Taxes 200,000 194,500 Interest exp earnings before Taxes 25,000 30,000 175,000 164,500 13 Taxes Net Income $ 105,000 $ 98,700 15 16 Balance Sheet info: 12/31/17 Cash 55,000 S 110,000 S 52,250 18 Accounts Receivable 111,100 19 Inventory 80,000 S 88,000 Total Current Assets 245,000 S 251,350 Fixed Assets (Net) 350,000 595,000 s Total Assets 622,350 24 Current Liabilities 140,000 S 161,000 Long Term Liabilities 150,000 155,000 290,000 $ Total Liabilities 316,000 27Stockholder's Equity 305,000 s 306,350 Total Liab & Equity: 595,000 S 622,350 29 31 Compute each of the following ratios for 2017 and 2018 and indicate whether each ratio was getting "better or "worse" from 2017 to 2 and was "good" or "bad" when compared to the Industry Avg in 2018 fround all numbers to 2 digits past the decimal place) 32 34 17/21/1712/31/18 55,000$ 110,000 111,100 80,000 S Balance Sheet info: 52,250 Cash Accounts Receivable 1s Inventory 88,000 $245,000251,350 20 Total Current Assets 21 Fixed Assets (Net) 22 Total Assets 595,000 622,350 S140,000 161,000 155.000 290000 S 316,000 Current Liabilities Long Term uabilities 26Total Liabilities 27 Stockholder's Equity 306,350 305,000 28 Total uab & Equity $595,000 622,350 Compute each of the following ratios for 2017 and 2018 and indicate whether each ratio was getting "better" or worse" from 2017 to 2018 and was "good" or "bad" when compared to the Industry Avg in 2018 (round all numbers to 2 digits past the decimal place) "Good" or "Bad" Getting Better or 2018 compared Getting Industry to Industry 2018 Worse? Avg Avg Profit Margin Current Ratio 0.10 Quick Ratio Return on Assets Debt to Assets Receivables turnover 18.00 Avg. collection period" Inventory Turnover Return on Equity 21.20 8.25 0.25 45 Times Interest Earned 46 47Assume a 360 day year 48 "Inventory Turnover can be computed 2 different ways. Use the formula listed in the text and by Connect. (the one the text indicates many credit reporting agencies generally use) 50 51 52