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Based on the liquidity ratios, how would you describe Burlington Company's short-term cash situation? What has happened to the Burlington Company efficiency ratios between 2009
Based on the liquidity ratios, how would you describe Burlington Company's short-term cash situation?
What has happened to the Burlington Company efficiency ratios between 2009 and 2010? What does that tell you about the company's inventory levels? About the company's efficient use of assets?
Have the company's profitability ratios improved? What may have caused this?
Income Statement | Balance Sheets | |||||||||||||||
for Years Ending December 31 | Common Size | as of December 31 | Liquidity Ratios | 2010 | 2009 | |||||||||||
Fin Stmts | Common Size | Current Ratio | 4% | 3% | ||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | Fin Stmts | Quick Ratio | 2% | 2% | |||||||
Sales | $ 900,000 | $ 800,000 | 100% | 100% | Assets | 2010 | 2009 | Working Capital | $ 122,000 | $ 102,000 | ||||||
Cost of Sales | 610,000 | 480,000 | 68% | 60% | Cash | $ 40,000 | $ 39,000 | 8% | 9% | Avg. Collection Period | 28% | 20% | $ 2,466.00 | $ 2,192.00 | ||
Gross Margin | 290,000 | 320,000 | 32% | 40% | Accounts Receivable | 54,000 | 59,000 | 11% | 13% | |||||||
Selling & Admin expenses | 248,000 | 280,000 | 28% | 35% | Inventory | 70,000 | 43,000 | 14% | 10% | Asset Efficiency Ratio | ||||||
Income before taxes | 42,000 | 40,000 | 5% | 5% | Prepaid Expenses | 4,000 | 4,000 | 1% | 1% | Inventory Turnover | 9% | 11% | ||||
Income tax expense | 17,000 | 18,000 | 2% | 2% | Fixed Assets (net) | 340,000 | 310,000 | 67% | 68% | |||||||
Net Income | $ 25,000 | $ 22,000 | 3% | 3% | Total Assets | $ 508,000 | $ 455,000 | 100% | 100% | |||||||
Solvency Ratio | ||||||||||||||||
Liabilities & Equities | Debt to Equity | 0.40% | 0.50% | |||||||||||||
Accounts Payable | $ 40,000 | $ 38,000 | 27% | 27% | ||||||||||||
12.50% | Salaries Payable | 2,000 | 3,000 | 1% | 2% | Profitability | ||||||||||
Taxes Payable | 4,000 | 2,000 | 3% | 1% | Return on Investment | 14% | 14% | |||||||||
Long Term Debt | 100,000 | 100,000 | 69% | 70% | ||||||||||||
Total Liabilities | 146,000 | 143,000 | 29% | 31% | ||||||||||||
Contributed Capital | 200,000 | 175,000 | 39% | 39% | Use the following amounts to calculate the | |||||||||||
Retained Earnings | 162,000 | 137,000 | 32% | 30% | 2009 asset efficiency ratios: | |||||||||||
Total Liabilities & Equities | $ 508,000 | $ 455,000 | 100% | 100% | 2008 inventory | $ 40,000 | ||||||||||
Use the following amounts to calculate the | ||||||||||||||||
rate of return for investment: | ||||||||||||||||
2008 Contributed Capital | $200,000 |
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