4. Using the information of the attached Balance Sheet and Profit and Loss Statement (Attached as follows), Calculate the following ratios.

(The PPt lecture notes (chapter 14) have all the related formula ) (Please show the detailed calculation and problem-solving steps. Any direct answer without detailed problem-solving steps will earn 0 point) (1 Point)

1) Net Working Capital (year 1)=

Net working capital (year 2)=

2) Current Ratios in year 1=

Current Ratios in year 2=

Quick Ratios in year 1 =

Quick Ratios in year 2=

Acid Test Ratios in year 1=

Acid Test Ratios in year 2=

3)Debt to Solvency ratios in year 1=

Debt to Solvency ratios in year 2=

Times interest Earned Ratios in year 1 =

Times interest Earned Ratios in year 2=

4) Inventory turn over ratio in year 1 =

Inventory turn over ratio in year 2=

5) The account receivable turnover ratio in year 1 and year 2. (If Credit sale is 10% of the total sales)

The account payable turnover ratio in year 1 and year 2. (If Credit sale is 25% of the goods purchased)

6) Return on invested capital ratio in year 1=

Return on invested capital ratio in year 2=

Return on owner's equity ratio in year 1=

Return on owner's equity ratio in year 2= Profit as a percentage of sales ratio in year 1=

Profit as a percentage of sales ratio in year 2=

(Please see the balance sheet and P&L statement on the next page!)

Comparative Balance Sheet AgBiz Corporation Difference Percent Difference $ -32,000 +25,000 -24,000 $ -31,000 -65.3 +500.0 -15.9 -15.1 0 +32.0 +160,000 -20.000 $+140,000 +200 0.0 +200 +0.2 December 31, December 31 Account Year! Year 2 Assets Current assets: Cash $ 49,000 $ 17,000 Accounts receivable 5,000 30,000 Inventories 151,000 127,000 Total current assets $205,000 $ 174,000 Fixed assets: Land 250,000 250,000 Buildings and equipment 500,000 660,000 Less: Depreciation - 150,000 - 170,000 Total fixed assets 600,000 740,000 Other investments: Cash value of life insurance 6,400 6,600 Investment in other firms 24,400 24,400 Investment in subsidiary 75,000 75,000 Total other 105,800 106,000 Total assets $910,800 $1,020,000 Liabilities and Owners' Equity Current liabilities: Accounts payable $ 20,000 $ 53,000 Taxes payable 1,500 1,750 Installment on long-term debt due this year 20,000 35,200 Total current liabilities 41,500 89,950 Long-term liabilities: Long-term notes payable 301,600 320,050 Total liabilities $343,100 $ 410,000 Owners' equity Capital stock 390,500 390,500 Retained earnings, January 147,200 177,200 Net income for year 30,000 42,300 Retained earnings, December 31 $567,700 $ 610.000 Total liabilities and owners' equity $910,800 $1,020,000 $+109,200 +12.0 $ +33,000 +250 +165.0 +16.7 +15,200 +48,450 +76,0 +116.7 +18,450 $ +66,900 0.0 +20.4 +30,000 +12,300 $ +42,300 +41.0 +7.5 $+109,200 +120 Figure 14-2 Comparative Profit-and-Loss Statement Comparative Profit-and-Loss Statement AgBiz Corporation Year 1 $1,250,000 Percent of Sales 100.0 Year 2 $1,465,000 Percent of Sales 100.0 Difference $+215,000 Percent Difference +17.2 +51.0 +2.6 100,000 +1,077,000 1,177,000 - 151,000 1,026,000 224,000 151,000 + 1,105,000 1.256,000 -- 127,000 1,129,000 336,000 +51,000 +28,000 +79,000 -24,000 +103.000 +1 12,000 159 821 +10.0 +50.0 17.9 Revenue from sales Less: Cost of goods sold Inventory-Jan. 1 + Goods purchased Goods available for sale - Inventory-Dec. 31 Cost of goods sold Gross margin Less: Operating expenses Salaries and wages Office expenses Selling and promotion Utilities and fuel Interest expenses Depreciation Total operating expenses Income before taxes Less: Allowance for income taxes Net income (to retained earnings) 9.6 100,000 1,000 38,000 30,000 4,000 15,000 $ 188,000 36,000 6,000 $ 30,000 140,000 3.400 72,000 44,600 5,000 20,000 $ 285.000 51,000 8,700 $ 42,300 +40,000 +2,400 +34,000 +14,600 +1,000 +5.000 $ +97.000 +15,000 +2.700 $ +12,300 +40.0 +240.0 +89.5 +48.7 +25.0 +33.3 +51.6 - 1.2 5.0 19.5 +41.7 0.5 -0.6 +45.0 +41.0