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Calculate Jimenez's 2017 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are
Calculate Jimenez's 2017 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Round DSO to the nearest whole number. Round the other ratios to one decimal place.
Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2017
Assets | |
Cash | $ 72,000 |
Accounts receivable | 439,000 |
Inventories | 894,000 |
Total current assets | $1,405,000 |
Fixed assets | 431,000 |
Total assets | $1,836,000 |
Liabilities and Equity | |
Accounts payable | $ 332,000 |
Notes payable | 100,000 |
Accruals | 170,000 |
Total current liabilities | $ 602,000 |
Long-term debt | 404,290 |
Common stock | 575,000 |
Retained earnings | 254,710 |
Total liabilities and equity | $1,836,000 |
Jimenez Corporation: Forecasted Income Statement for 2017
Sales | $4,290,000 |
Cost of goods sold | 3,580,000 |
Selling, general, and administrative expenses | 370,320 |
Depreciation and amortization | 159,000 |
Earnings before taxes (EBT) | $ 180,680 |
Taxes (40%) | 72,272 |
Net income | $ 108,408 |
Jimenez Corporation: Per Share Data for 2017 | |
EPS | $ 4.71 |
Cash dividends per share | $ 0.95 |
P/E ratio | 5.0 |
Market price (average) | $ 23.57 |
Number of shares outstanding | 23,000 |
Industry Ratios | |
Quick ratio | 1.0 |
Current ratio | 2.7 |
Inventory turnover** | 7.0 |
Days sales outstanding*** | 32.0 days |
Fixed assets turn over** | 13.0 |
Total assets turnover** | 2.6 |
Return on assets | 9.1% |
Return on equity | 18.2% |
Profit margin on sales | 3.5% |
Debt-to-assets ratio | 21.0% |
Liabilities-to-assets ratio | 50.0% |
P/E ratio | 6.0 |
Price/Cash flow ratio | 3.5 |
Market/Book ratio | 3.5
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Calculate Jimenez's 2017 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez's projected strengths and weaknesses. Assume that there are no changes from the prior period to any of the operating balance sheet accounts. Round DSO to the nearest whole number. Round the other ratios to one decimal place Ratios Quick ratio Current ratio Inventory turnover Days sales outstanding Fixed assets turnover Total assets turnover Return on assets Return on equity Profit margin on sales Debt ratio Liabilities-to-assets EPS Stock Price P/E ratio Price/Cash flow ratio Market/Book ratio 1.0 2.7 7.0 32 days 13.0 Weak | 2.3 4 37 10 2.3 5.9 13.1 2.5 22.03 54.8 Weak | Poor days Poor Poor Poor 9.1% 18.2% 3.5% 21.0% 50.0% High | High | $4.71 n.a $23.57 n.a 6.0 3.5 5.00 Poor 2.0 Poor n.a So, the firm appears to be badly- managed
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