Question
Balance Sheet ($000) Cash 500 Accounts receivable 2,000 Inventories 1,000 Current assets 3,500 Net fixed assets 4,500 Total assets 8,000 Accounts payable 1,100 Accrued expenses
Balance Sheet ($000)
Cash 500
Accounts receivable 2,000
Inventories 1,000
Current assets 3,500
Net fixed assets 4,500
Total assets 8,000
Accounts payable 1,100
Accrued expenses 600
Short-term notes payable 300
Current liabilities 2,000
Long-term debt 2,000
Total Liabilities 4,000
Owners' equity 4,000
Total liabilities and owners' equity 8,000
Income Statement ($000)
Net sales (all credit) 8,000
Cost of goods sold (3,300)
Gross profit 4,700
Operating expenses
(includes $500 depreciation) (3,000)
Operating income 1,700
Interest expense (367)
Earnings before taxes 1,333
Income taxes (40%) (533)
Net income 800
Answer the Following Questions
A- The company is applying for a Bank Loan. Do you recommend the bank sanction the Loan or not. Explain why?
B- Would you recommend investing in this company? Similar companies pay a 12% return. Calculate any ratio you think appropriate?
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Financial Intelligence For Entrepreneurs What You Really Need To Know About The Numbers
Authors: Karen Berman, Joe Knight
1st Edition
1422119157, 9781422119150
