Question
Can you please do the following financial equations with the given data? Key (Categories of) Financial Ratios Profitability Ratios Profit Margin (%) = Net Income
Can you please do the following financial equations with the given data?
Key (Categories of) Financial Ratios
Profitability Ratios
Profit Margin (%) = Net Income / .. Sales
Return On Assets (ROA) (%) = Net Income / Total Assets
Return On Equity (ROE) (%) = Net Income / Total Owners Equity
Asset Utilization Ratios
Receivable Turnover (x) = ..Sales / (A/R)
Inventory Turnover (x) = .. Sales / Inventory
Total Asset Turnover (x) = .. Sales / Total Assets
Fixed Asset Turnover (x) = .. Sales / Total Fixed Assets
Average Collection Period (Days) = (A/R) / Average Daily Credit Sales
where: Average Daily Credit Sales = ((..Sales Per Year) / 360 Days Per Year) * % of Sales done on
a credit basis
Liquidity Ratios
Current Ratio (x) = Total Current Assets / Total Current Liabilities
Quick Ratio (x) = (Total Current Assets Inventory) / Total Current Liabilities
Net Working Capital ($) = Total Current Assets Total Current Liabilities
Debt Utilization Ratios
Debt To Assets (%) = Total Debt / Total Assets
Debt To Equity (%) = Total Debt / Total Owners Equity
Times Interest Earned (x) = EBIT / Interest Expense
SAXTON COMPANY
Income Statement
For the Year Ended December 31, 2009
Sales (all on credit) $ 4,000,000
Cost of Goods Sold3,000,000
___________
Gross Profit.$ 1,000,000
Selling and Administrative Expenses. 450,000
_____________
Operating Profit $ 550,000
Interest Expense 50,000
Extraordinary Loss. 200,000
Earnings Before Taxes$ 300,000
Income Taxes (33%). 100,000
Net Income.$ 200,000
SAXTON COMPANY
Balance Sheet
As of December 31, 2009
Assets
Cash $ 30,000
Accounts Receivable.. 350,000
Marketable Securities .. 50,000
Inventory. 370,000
____________
Total Current Assets. $ 800,000
Net Plant and Equipment.. 800,000
____________
Total Assets.$ 1,600,000
Liabilities and Stockholders Equity
Accounts Payable..$ 50,000
Notes Payable.. 250,000
_____________
Total Current Liabilities..$ 300,000
Long Term Liabilities 300,000
____________
Total Liabilities ..$ 600,000
Common Stock. 400,000
Retained Earnings.. 600,000
____________
Total Stockholders Equity.$ 1,000,000
____________
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