B LO 9 2020 1,188,000 481,500 706,500 346,500 360,000 30 000 330,000 132,000 198,000 1 BUSI 320 Comprehensive Problem 1 Version B 2 Use the following information to answer the questions below: 3 note: all sales are credit sales 4 5 Income Stmt info: 2019 6 Sales $ 1,100,000 $ 7 less Cost of Goods Sold: 450,000 8 Gross Profit 650,000 9 Operating Expenses 330,000 10 Earnings before Interest & Taxes 320,000 11 Interest exp 25,000 12 earnings before Taxes 295,000 13 Taxes 118,000 14 Net Income $ 177,000 $ 15 16 Balance Sheet info: 12/31/19 17 Cash 60,000 $ 18 Accounts Receivable 80,000 $ 19 Inventory 110,000 $ 20 Total Current Assets $ 250,000 $ 21 Fixed Assets (Net) $ 300,000 $ 22 Total Assets 550,000 $ 23 24 Current Liabilities $ 130,000 $ 25 Long Term Liabilities $ 150,000 $ 26 Total Liabilities $ 280,000 $ 27 Stockholder's Equity $ 270,000 $ 28 Total Liab & Equity: $ 550,000 $ 29 12/31/20 72,000 81,600 135,000 288,600 315,000 603,600 $ NN 139,100 183,000 322,100 281,500 603,600 $ 0 1 2 3 Compute each of the following ratios for 2019 and 2020 and indicate whether each ratio was getting better" or "worse" from 2019 to 2020 and was "good" or "bad" compared to the Industry Avg in 2020 (round all numbers to 2 digits past the decimal place) 4 Getting Better or Getting Worse? 2019 2020 35 36 37 38 39 40 41 42 Profit Margin Current Ratio Quick Ratio Return on Assets Debt to Assets Receivables turnover Avg. collection period Inventory Turnover Return on Equity Times Interest Earned "Good" or "Bad" 2020 compared Industry to Industry Avg Avg 0.11 1.90 1.12 28 0.55 18.00 21.20 8.25 0.55 11.15 43 44 45 46 47 48 49 50 51 52 53 54 *Assume a 360 day year **Inventory Turnover can be computed 2 different ways. Use the formula listed in the text (the one the text indicates many credit reporting agencies generally use)