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Company XYZ Balance Sheet Assets Liabilities Cash $15,000 Accounts Payable $20,000 Marketable Securities 25,000 Accrued Wages 17,000 Accounts Receivable 30,000 Bonds 15,000 Inventory 35,000 Bank

  1. Company XYZ

Balance Sheet

Assets Liabilities

Cash $15,000 Accounts Payable $20,000

Marketable Securities 25,000 Accrued Wages 17,000

Accounts Receivable 30,000 Bonds 15,000

Inventory 35,000 Bank Loan 50,000

Net Plant & Equipment $125,000 Total Liabilities $102,000

Owners Equity

Common Stock $85,000

Retained Earnings 43,000

Total Owners Equity $128,000

Total Assets $230,000 Total Liabilities & Owners Equity $230,000

Sales during the year were $550,000.

Net Income for the year was $40,000.

Market Price per share is currently $20.00.

Interest expense for the year was $7,000.

Earnings before taxes were $50,000.

20,000 shares of Common Stock Outstanding

Based on the above information calculate and interpret the following ratios: (40 points)

  1. Profit Margin
  2. ROA
  3. ROE
  4. Price/Earnings Ratio
  5. Market to Book Value

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