Question
Calculate the ratios for year 2 that are listed below: COMPANY XYZ Income Sheet Year 1 Year 2 Sales (all on credit) $1,400,000 $1,375,000 Cost
Calculate the ratios for year 2 that are listed below:
COMPANY XYZ
Income Sheet
Year 1 | Year 2 | ||
Sales (all on credit) | $1,400,000 | $1,375,000 | |
Cost of Goods sold | 850,000 | 900,000 | |
Gross profit | $550,000 | $475,000 | |
Selling and administrative expense* | 240,000 | 230,000 | |
Operating profit (EBIT) | $310,000 | 245,000 | |
Interest expense | 40,000 | 37,000 | |
Net income before taxes | $270,000 | 208,000 | |
Taxes | 81,000 | 62,400 | |
Net income | $189,000 | 145,600 | |
Shares | 30,000 | 30,001 | |
Earnings per share | $6.30 | $4.85 | |
*Includes $15,000 in lease payments for each year. | |||
COMPANY XYZ
Balance Sheet Assets | Year 1 | Year 2 |
Cash | $50,000 | $55,000 |
Marketable securities | 20,000 | 20,000 |
Accounts receivable | 150,000 | 150,000 |
Inventory | 200,000 | 210,000 |
Total current assets | $420,000 | 435,000 |
Net plant and equipment | 650,000 | 650,000 |
Total assets | $1,070,000 | $1,085,000 |
Liabilities and Stockholders Equity | ||
Accounts payable | $175,000 | 190,000 |
Accrued expenses | 25,000 | 25,000 |
Total current liabilities | $200,000 | 215,000 |
Long-term liabilities | 310,000 | 310,000 |
Total liabilities | $510,000 | 525,000 |
Common stock ($2 par) | 60,000 | 60,000 |
Capital paid in excess of par | 190,000 | 190,000 |
Retained earnings | 310,000 | 310,000 |
Total stockholders equity | $560,000 | 560,000 |
Total liabilities and stockholders equity | $1,070,000 | $1,085,000 |
Create your response to this:
Ratio Description | Ratio | Formula - showing numbers (labels) 435,000 (Current Assets)/215,000 (Current Liabilities) |
Current Ratio | ||
Quick Ratio (Acid Test Ratio) | ||
Days Sales Outstanding (Average Collection Period) | ||
Inventory Turnover | ||
Fixed Asset Turnover | ||
Total Asset Turnover | ||
Debt Ratio | ||
Times Interest Earned | ||
Gross Profit Margin | ||
Net Profit Margin | ||
Return on Assets | ||
Return on Equity |
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