Amazing Company began operations on January 1, 2015, and is now in its fourth year of operations. It is a retail sales company with a large amount of online sales. The adjusted trial balance as of December 31, 2019 appears below, along with prior year balance sheet data and some additional transaction data for 2018 AMAZING COMPANY Adjusted Trial Balance 12/31/19 Account Title Cash Accounts Receivable Inventory Office Equipment Machinery & Tools Accumulated Depreciation Accounts Payable Salaries Payable Sales Tax Payable Note Payable-Long Term Common Stock, $10 par Retained Earnings Dividends Sales Revenue Cost of Goods Sold Rent Expense Salaries Expense Insurance Expense Legal Fees Depreciation Expense Interest Expense 2019 Adjusted Trial Balance Debit Credit 170,000 55,000 29,000 53,000 59,000 24,000 12,200 1,200 10,000 33,000 240,000 28,600 10,000 240,000 114,200 20,000 48,000 11,800 9,200 8,000 1,800 589,000 $ 589,000 2018 Post-Closing Trial Balance Debit Credit 125,600 35,000 15,600 47,000 21,000 16,000 12,800 1,300 15,500 10,000 160,000 28,600 $ $ 244,200 244,200 Transaction Data for 2019 (Note, these transactions were included in the trial balance numbers above.) Cash paid for purchase of office equipment Cash paid for purchase of tools Acquisition of Machinery with Notes Payable-Long-term 6,000 15,000 23,000 Transaction Data for 2019 (Note, these transactions were included in the trial balance numbers above.) Cash paid for purchase of office equipment Cash paid for purchase of tools Acquisition of Machinery with Notes Payable-Long-term Cash payment of dividends Cash receipt from issuance of 8,000 shares of common stock 6,000 15,000 23,000 10,000 80,000 Current Ratio Working Capital Debt-to- Equity Ratio Cash Ratio Debt Ratio Requirement 1. Compute these ratios: Round ratios to two decimal places or format as percentages or currency as appropriate. Inventory Turnover Days Sales in Inventory Gross Profit Percentage Accounts Receivable Days Sales in Turnover Receivables 2018 Total Assets = on Rate of Return Rate of Return on Asset Turnover Stockholders' Earnings Per Total Assets Ratio Equity Share 2018 SHE = *Current Stock Price is $10.00 per share Price/ Earnings Ratio* Dividend Payout Dividend Yield Dividend per shares Requirement 2. Based on the ratios computed above, analyze the company's ability to pay its debts (both current and long term). Refer to at least 3 specific ratios in your analysis. Requirement 3: Based on the ratios computed above, analyze the company's management of inventory. Refer to at least 2 specific ratios in your analysis. Requirement 4: Based on the ratios computed above, analyze the company's management of receivables. Refer to at least 2 specific ratios in your analysis
