Ch 04- Video Lesson - Analysis of Financial Statements Suppose that Royval Inc has the following data: Total assets turnover 1.5 Days sales outstanding 36.5 days Inventory turnover ratio 4 Fixed assets turnover 4 Current ratio Gross profit margin on sales: 2 20.00% Also suppose that Royval Inc has the following balance sheet: Balance Sheet Assets Cash Liabilities Current Liabilities Accounts receivable Inventories Long-term debt $135,000 Common stock Fixed assets Retained earnings $120,000 Total assets $500,000 Total Liabilities and equity 04- Video Lesson - Analysis of Financial Statements Sales Cost of goods sold Sales . Given the value of total assets turnover, along with the level of According to the video, total assets turnover is equal to total assets given, this means that Royval's sales must be $750,000.00 Receivables According to the video, DSO (days sales outstanding) can be written as A you already calculated, this means that Royval's recevables must be $75,000.00 Sales According to the video, the inventory ratio can be written as equal to the level of sales you already calculated, this means that Royval's inventories must be According to the video, the fixed asset turnover ratio can be written as Given the value of DSO, along with the level of sales Given the value of the inventory ratio, along with This means that Royval has fixed assets of According to the video, cash can be written as total assets minus fixed assets, inventories, and accounts receivable. This yields a value of cash of for Royval. According to the video, the current ratio can be written as a value of current liabilities of approximately Plugging in the value for current assets and the value of the current ratio yields According to the video, the value of total assets is equal to the value of total liabilities and equity CENGAGE MINDTAP Ch 04- Video Lesson - Analysis of Financial Statements In the video, total liabilities and equity is equal to . Given the level of total liabilities and equity, as well as retained earnings, current liabilities and the level of long-term debt, solving for Royval's common stock yields According to the video, gross profit margin can be written as calculated, this means that Royval has a cost of goods sold of Step 3: Practice: Balance Sheet Analysis Now it's time for you to practice what you've learned. Suppose that Royval Inc has the following data: Given the gross profit margin and the level of sales you have already Total assets turnover Days sales outstanding 1.5 36.5 days Inventory turnover ratio 4 Fixed assets turnover 4 Current ratio 2 Gross profit margin on sales: 20.00% Also suppose that Royval Inc has the following balance sheet: Also suppose that Royval Inc has the following balance sheet: Cash Assets Accounts receivable Inventories Fixed assets Balance Sheet Liabilities Current Liabilities Long-term debt Common stock $128,250 Retained earnings $114,000 Total assets $475,000 Total Liabilities and equity Sales Cost of goods sold Use the formulas you learned about in the previous stage of the problem to answer the following questions. Given the value of total assets turnover, along with the level of total assets given, this means that Royval's sales must be Given the value of DSO, along with the level of sales you already calculated, this means that Royval's receivables must be Given the value of the inventory ratio, along with the level of sales you already calculated, this means that Royval's inventories must be . Given the value of the fixed assets turnover ratio, as well as the level of sales, this means that Royval's fixed assets must be equal to 04- Video Lesson - Analysis of Financial Statements Fixed assets Retained earnings $114,000 Total assets $475,000 Total Liabilities and equity Sales Cost of goods sold Use the formulas you learned about in the previous stage of the problem to answer the following questions. Given the value of total assets turnover, along with the level of total assets given, this means that Royval's sales must be Given the value of DSO, along with the level of sales you already calculated, this means that Royval's receivables must be Given the value of the inventory ratio, along with the level of sales you already calculated, this means that Royval's inventories must be Given the value of the fixed assets turnover ratio, as well as the level of sales, this means that Royval's fixed assets must be equal to Solving for cash yields a value of cash of inventories, the level of current liabilities must be for Royval. Given the current ratio of 2 and values of cash, accounts receivable, and Given the level of retained earnings, current liabilities, and long-term debt, along with the relationship between total assets and total liabilities and equity, this means that Royval's common stock must be Given the gross profit margin and the level of sales you have already calculated, this means that Royval has a cost of goods sold of