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Calculate the following ratios for year 2014 (round all ratios to two places behind the decimal) 1 Working capital 101,114 2 Current ratio 2.18 3 Acid test ratio 1.66 4 Accounts receivable turnover 2.21 (use net sales as numerator) 5 Collection period of receivables - 162.90 (use 360 days in each year) 6 Accounts payable turnover ratio 7 Inventory turnover ratio 8 Days to sell inventory 9 Debt-to-Equity ratio 0.87 0.94 383.10 0.42 10 Times interest earned 1.46 11 RNOA (assume 12% tax rate) 0.44% 12 ROCE 0.51% CAPTAIN JET INC INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expenses Total Operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes 123,500 123,100 85,316 (400) 37,784 12,152 45,500 2,500 14,250 6,300 400 1,300 82,402 2,914 250 2,664 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginni 152,250 Net Income/Loss Dividends Payment Retained Earnings, End of 154,114 2,664 (800) CAPTAIN JET INC BALANCE SHEET 31-Dec-13 Current Assets Accounts Receivable Prepaid Insurance 41,200 54,800 40,000 540 500 137,040 84,798 56,700 40.416 Prepaid Rent 4,000 186.454 Total Current Assets Non-Current Assets Long-term Investments nvestments in equity securities Land held for future development 51,000 45,500 51,000 45,500 Property, Flant, and Equipment Buildings Less: Accumulated Depreciation 391,000 (201,750) 376,000 (187,500) Intangible Assets 8,000 76,000 48,000 417.750 8,000 76,000 48,000 417,000 554,040 apitalized Developmentosts Goodwil Other ldentifiable Intangible Assets Total Assets Current Liabilities Total Non-Current Assets 604.20 ts payable 53,500 33,500 Salary and Wages Payable Interest Payable Unearned Revenue Income TaH payable Property taes payable Utilities payable 1,800 12,000 8,690 6,600 1.250 85.340 1,500 12,000 8,440 6,600 Total Current Liabilities 62,040 Non-Current Liabilities Notes payable 120,000 110,000 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities 120,000 205.340 110,000 172,040 Total Liabilities Stockholders Equity Common Stock ($10par, 11,000 and 10,000 shares) Preferred Stock(5% dividend, $100 par values, 105C Pai-in capital-Lommon tock Pai-in capital-Preferred Stock Retained Earnings Accumulated Other Comprehensive Income Less: Treasury Stock 110,000 105,000 27,500 10,000 154,114 5,000 (12,750) 398,864 100,000 100,000 27,500 10,000 152,250 5,000 12.750) 382,000 554,040 Total Stockholders Equity Total Liabilities and Stockholders Equity 604,20 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 201 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expenses Total operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes step 1 step 2 step 4 step 3 step 5 step 5 step 5 step 7 step 6 step 5 step 5 step CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 201 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change 2 Gross profit margin is the same as 2014 profit margin 3 Depreciation expense/Prior PPE (gross-4% 4 Interest expense/prior year long-term debt 6% 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth 6 Income tax expense/ pre-tax income = 12% 7 A/R turnover is the same as that calculated for year 2014 8 A/P turnover is the same as that calculated for year 2014 9 Inventory turnover is the same as that calculated for year 2014 10 There is no change in current assets other than Cash, A/R and inventory 11 Capital expenditure/Sales-7% 12 Assume no change in long-term assets except for PP&E 13 Assume no change in all liabilities, excpet for A/P 14 Assume no change in shareholders' Equity except for Retained Earnings 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock Calculate the following ratios for year 2014 (round all ratios to two places behind the decimal) 1 Working capital 101,114 2 Current ratio 2.18 3 Acid test ratio 1.66 4 Accounts receivable turnover 2.21 (use net sales as numerator) 5 Collection period of receivables - 162.90 (use 360 days in each year) 6 Accounts payable turnover ratio 7 Inventory turnover ratio 8 Days to sell inventory 9 Debt-to-Equity ratio 0.87 0.94 383.10 0.42 10 Times interest earned 1.46 11 RNOA (assume 12% tax rate) 0.44% 12 ROCE 0.51% CAPTAIN JET INC INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expenses Total Operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes 123,500 123,100 85,316 (400) 37,784 12,152 45,500 2,500 14,250 6,300 400 1,300 82,402 2,914 250 2,664 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginni 152,250 Net Income/Loss Dividends Payment Retained Earnings, End of 154,114 2,664 (800) CAPTAIN JET INC BALANCE SHEET 31-Dec-13 Current Assets Accounts Receivable Prepaid Insurance 41,200 54,800 40,000 540 500 137,040 84,798 56,700 40.416 Prepaid Rent 4,000 186.454 Total Current Assets Non-Current Assets Long-term Investments nvestments in equity securities Land held for future development 51,000 45,500 51,000 45,500 Property, Flant, and Equipment Buildings Less: Accumulated Depreciation 391,000 (201,750) 376,000 (187,500) Intangible Assets 8,000 76,000 48,000 417.750 8,000 76,000 48,000 417,000 554,040 apitalized Developmentosts Goodwil Other ldentifiable Intangible Assets Total Assets Current Liabilities Total Non-Current Assets 604.20 ts payable 53,500 33,500 Salary and Wages Payable Interest Payable Unearned Revenue Income TaH payable Property taes payable Utilities payable 1,800 12,000 8,690 6,600 1.250 85.340 1,500 12,000 8,440 6,600 Total Current Liabilities 62,040 Non-Current Liabilities Notes payable 120,000 110,000 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities 120,000 205.340 110,000 172,040 Total Liabilities Stockholders Equity Common Stock ($10par, 11,000 and 10,000 shares) Preferred Stock(5% dividend, $100 par values, 105C Pai-in capital-Lommon tock Pai-in capital-Preferred Stock Retained Earnings Accumulated Other Comprehensive Income Less: Treasury Stock 110,000 105,000 27,500 10,000 154,114 5,000 (12,750) 398,864 100,000 100,000 27,500 10,000 152,250 5,000 12.750) 382,000 554,040 Total Stockholders Equity Total Liabilities and Stockholders Equity 604,20 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 201 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expenses Total operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes step 1 step 2 step 4 step 3 step 5 step 5 step 5 step 7 step 6 step 5 step 5 step CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 201 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change 2 Gross profit margin is the same as 2014 profit margin 3 Depreciation expense/Prior PPE (gross-4% 4 Interest expense/prior year long-term debt 6% 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth 6 Income tax expense/ pre-tax income = 12% 7 A/R turnover is the same as that calculated for year 2014 8 A/P turnover is the same as that calculated for year 2014 9 Inventory turnover is the same as that calculated for year 2014 10 There is no change in current assets other than Cash, A/R and inventory 11 Capital expenditure/Sales-7% 12 Assume no change in long-term assets except for PP&E 13 Assume no change in all liabilities, excpet for A/P 14 Assume no change in shareholders' Equity except for Retained Earnings 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock
