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 15,438 (50) 15,388 4,723 10,665 1,519 5,688 313 1,781 Interest Expenses 788 Supplies Expenses Bad Debt Expenses Total Operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes 50 163 10,300 364 31 333 CAPTAIN JET INc INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Begir Net Income/Loss 19,031 333 Dividends Payment (100) Retained Earnings, End d 19,264 CAPTAIN JET INC. BALANCE SHEET 31-Dec-14 31-Dec-13 Current Assets 5,150 Cash 10,600 Accounts Receivable 7,088 6,850 Inventories 5,052 5,000 Prepaid Insurance Prepaid Rent 68 68 500 63 Total Current Assets 23,307 17,130 Non-Current Assets O O Long-term Investments Investments in equity seourities Land held for future development Property, Plant, and Equipment Buildings Less: Accumulated Depreciation O 0 6,375 6,375 5,688 5,688 0 0 48,875 47,000 (25,219 (23,438) Intangible Assets Capitalized Development Costs 0 0 1,000 1,000 Goodwill 9,500 9,500 Other Identifiable Intangible Assets 6,000 6,000 Total Non-Current Assets 52,219 52,125 Total Assets 75,526 69,255 0 O Current Liabilities 0 0 Accounts payable Salary and Wages Payable Interest Payable 6,688 4,188 188 0 225 188 Unearned Revenue 1,500 1,500 Income Ta yable Property taxes payable Utilities payable 1,086 1,055 825 825 156 0 aral C,..ron I :shiliic- 10 668 7 755 Total Non-Current Liabilities 15,000 13,750 Total Liabilities Stockholders Equity Common Stock ($10 par, 11,000 and 10,000 shares) Preferred Stock (5 % dividend, $100 par values, 105 Paid-in-capital-Common Stock Paid-in-capital - Preferred Stock Retained Earnings Accumulated Other Comprehensive Income Less: Treasury Stock 25,668 21,505 0 0 13,750 12,500 13,125 12,500 3,438 3.438 1,250 1,250 19,264 19,031 625 625 (1,594) (1,594) Total Stockholders' Equity Total Liabilities and Stockholders' Equity 49,858 47,750 75,526 69,255 Calculate the following ratios for year 2014 (round all ratios to two places behind the decimal): 1 Working capital 2 Current ratio 3 Acid test ratio 4 Accounts receivable turnover (use net sales as numerator) 5 Collection period of receivables (use 360 days in each year) 6 Accounts payable turnover ratic 7 Inventory turnover ratio 8 Days to sell inventory 9 Debt-to-Equity ratio 10 Times interest earned 11 RNOA (assume 12 % tax rate) 12 ROCE 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 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 6% 9 Inventory turnover is the same as that calculated for year 2014 no change in current assets other than Cash, A/R and inventory 10 There is 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 CAPTAIN JET INC INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue step 1 Less: Sales Return step 2 Net Sales Cost of Goods Sold step 4 Gross Profit step 3 Utilities Expenses step 5 Salary and Wages Expenses step 5 Rent Expenses step 5 Depreciation Expenses step 7 Interest Expenses step 6 Supplies Expenses ad Debt Expenses step 5 step 5 Total operating Expenses Earnings before Income Taxes step 8 Income Tax Expenses Earnings after Income Taxes CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year CAPTAIN JET INC. Balance Sheet FOR THE YEAR ENDED DECEMBER 31, 2014 Current Assets Cash LAST STEP Use calculated A/R turnover from "ratios" Accounts Receivable tep 1 Use calcllated inventory turnover from "ratios" Inventories step 2 Prepaid Insurance step 3 Prepaid Rent step 3 Total Current Assets Non-Current Assets Long-term Investments Investments in equity Land held for future d step4 step 4 Property, Plant, and Equipment Buildings Less: Accumulated De Intangible Assets step 5 step 6 Capitalized Developm step 7 Goodwill step 7 Other Identifiable Inta step 7 Total Non-Current Assets Total Assets Current Liabilities Accounts payable step 8 step 9 step 9 step 9 step 9 step 9 Use calculated A/P turnover from "ratios" Salary and Wages Payabl Interest Payable Unearned Revenue Income Tax payable Property taxes payable Utilities payable step 9 Total Current Liabilities Non-Current Liabilities Notes payable step 10 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock step 12 Preferred Stock (5% divide step 12 Paid-in-capital Commor step 12 Paid-in-capital Preferre step 12 Retained Earnings step 11 Accumulated Other Comp step 12 Less: Treasury Stock. step 12 Total Stockholders' Equity Total Liabilities and Stockholders' Equity