B 6 DATA 7 Balance Sheet: (000) 8 Cash 9 Accounts receivable 10 Inventories 11 Current assets 12 Net fixed assets 13 Total assets $500 2,000 1,000 $3,500 4,500 $8,000 14 $1,100 600 300 15 Accounts payable 16 Accrued expenses 17 Short-term notes payable Current liabilities 19 Long-term debt 20 Owners' equity 21 Total liabilities and owners' equity 18 $2,000 2,000 4,000 $8,000 22 23 Income Statement: (000) 24 Sales (all credit) 25 Cost of goods sold 26 Gross profit 27 Operating expenses (includes $500 depreciation) 28 Operating profit 29 Interest expense 30 Earnings before taxes 31 Income taxes (21%) $8,000 3,300 $4,700 3,000 $1,700 367 $1,333 280 $1.053 32 Net income 33 36 37 38 34 SOLUTION 35 Calculate the following ratios: Current ratio Debt ratio Times interest carnod 39 Average collection period 40 Inventory turnover 41 Fixed-asset turnover Total assets turnover 43 Operating profit margin Operating return on assets Return on equity 42 44 45 B C 38 33 34 SOLUTION 35 Calculate the following ratios: 36 Current ratio 37 Debt ratio Times interest earned 39 Average collection period 40 Inventory turnover 41 Fixed-asset turnover 42 Total assets turnover 43 Operating profit margin 44 Operating return on assets 45 Return on equity 46 47 Requirements: Important note: All calculations must be shown using cell references. Do NOT enter absolute numbers in the cells. 48 49 2. In cell B36, calculate the current ratio. (1 point) 50 3. In cell B37, calculate the debt ratio. (1 point) 51 4. In cell B38, calculate the times interest earned. (1 point) 52 S. In cell B39, calculate the average collection period. (1 point) 53 6. In cell B40, calculate the inventory turnover. (1 point) 54 7. In cell B41, calculate the fixed-assets turnover. (1 point) 55 8. In cell B42, calculate the total assets turnover. (1 point) 56 9. In cell B43, calculate the operating profit margin. (1 point) 57 10. In cell B44, calculate the operating return on assets. (1 point) 58 11. In cell B45, calculate the return on equity. (1 point)