Financial Statements:

Reading and creating financial statements is very important in the finance world. Using the information below, please create an income statement and a balance sheet. You may do so in a WORD or EXCEL document.

Sales	$55,000
Accumulated Depreciation	19,000
Cash	?
Cost of good sold	32,000
Accounts Receivable	7,300
Depreciation Expense	3,800
Accounts Payable	6,500
Interest Expense	2,600
Short-term notes payable	2,600
Income taxes	5,985
Inventories	4,700
Marketing, general and admin expenses	4,500
Gross fixed assets	64,800
Long-term debt	36,000
Common stock	12,000
Other assets	1,500
Retained earnings	13,850

For the income statement be sure to have two columns Dollar Value and Percentage of Sales...For example. (Sales 10,000, Cost of goods sold (COGS) 4,000 should be expressed in the following way.)

Dollar Value % of Sales

Sales $10,000 100%

COGS (4,000) (40%)

Gross profits $6,000 60%

You will follow a similar approach with the balance sheet. In this case the two columns would be titled Dollar Value and Percentage of Total Assets. Remember that in order to "BALANCE" Assets must EQUAL Liability and Equity.

Ratios:

Complete a financial analysis. You are asked to calculate the financial ratios for the the year 2015. Afterward, define and interpret the financial ratios for 2015. In other words, what does the ratio tell you, what is it for W&T, and what does it tell you about the company itself (interpret)? (Hint: Page 140-141 has the ratios and equations you need; they are also on the outline I give you. ) You may put your analysis in the format below or create your own format as long as it is easy to read.

Compute financial ratios.

Financial ratios 2015

Current ratio

Acid-test ratio

Days in receivables

Days in inventory

Operating return on assets

Operating profit margin

Total asset turnover

Fixed asset turnover

Debt ratio

Times interest earned

Return on equity

Return on Assets

When you get ready to define and interpret you can do so in the following manner. (EXAMPLE: Alphabet (Google) has a current ratio of 3.96.

*****Current ratio measures a firm's degree of liquidity by comparing its current assets to its current liabilities. For Google, the company has $3.96 in current assets, for every $1 in short term debt.