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ABC COMPANY BALANCE SHEET Year 2 Year 1 Current Assets: Cash and cash equivalents $50,000 $35,000 Trading Securities ( at fair value) 75,000 65,000 Accounts
ABC COMPANY | ||
BALANCE SHEET | ||
Year 2 | Year 1 | |
Current Assets: | ||
Cash and cash equivalents | $50,000 | $35,000 |
Trading Securities ( at fair value) | 75,000 | 65,000 |
Accounts Receivable | 300,000 | 290,000 |
Inventory (at lower of cost or market) | 290,000 | 275,000 |
Total Current Assets | 715,000 | 665,000 |
Investments available for sale (at fair value) | 350,000 | 300,000 |
Fixed Assets: | ||
Property, Plant and Equipment (at cost) | 1,900,000 | 1,800,000 |
Less: Accumulated Depreciation | (380,000) | (350,000) |
1,520,000 | 1,450,000 | |
Goodwill | 30,000 | 35,000 |
Total Assets | $2,615,000 | $2,450,000 |
Current Liabilities: | ||
Accounts Payable | $150,000 | $125,000 |
Notes Payable | 325,000 | 375,000 |
Accrued and other liabilities | 220,000 | 200,000 |
Total current liabilities | 695,000 | 700,000 |
Long-Term Debt: | ||
Bonds and notes payable | 650,000 | 600,000 |
Total liabilities | 1,345,000 | 1,300,000 |
Stockholders' Equity: | ||
Common Stock ( 1000,000) shares outstanding | 500,000 | 500,000 |
Additional Paid in Capital | 350,000 | 350,000 |
Retained Earnings | 420,000 | 300,000 |
Total Equity | 1,270,000 | 1,150,000 |
Total Liablities and Equity | $2,615,000 | $2,450,000 |
The following information about ABC is related to the year ended 12/31/xx; year 2 | ||
Sales | $1,800,000 | |
Cost of Goods Sold | (1,000,000) | |
Gross Profit | 800,000 | |
Operating Expenses | (486,970) | |
Interest Expense | (10,000) | |
Earnings before income tax | 303,030 | |
Income tax (34%) | $(103,030.00) | |
Net Income after tax | $200,000 | |
Earnings per share | $2 | |
Operating Cash Flow | $255,000 | |
Yearly Dividends | $.80/per share | |
Market price/share | $12.00
|
Based on the financial data provided, the financial discussions in this class and prior classes as well as the ratio information on CourseWeb and other available information, calculate the following equations and ratios AND BRIEFLY COMMENT on the results.
MUST SHOW YOUR CALCULATIONS AND EXPLAIN
Profitability
Net Profit Margin
Return on Total assets
Return on Investment
Return on Equity
Ability to Pay Long Term Debt (Solvency)
Debt to Equity
Debt Ratio
Times Interest Earned
Operating cash flow to Debt
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