Question
FSU Daycare, Inc. has the following financial statements data for 2008: Income Statement Balance Sheet Sales $102,500 Cash $40,000 Cost of Goods $50,000 Fixed Assets
FSU Daycare, Inc. has the following financial statements data for 2008:
| Income Statement |
|
| Balance Sheet |
|
| Sales | $102,500 |
| Cash | $40,000 |
| Cost of Goods | $50,000 |
| Fixed Assets | $55,000 |
| SG&E Expenses | $35,000 |
| Total Assets | $95,000 |
| EBIT | $17,500 |
| Accounts Payable | $12,000 |
| Interest Expense | $2,500 |
| Long-term Debt | $25,000 |
| Taxes | $6,000 |
| Retained Earnings | $28,000 |
| Net Income | $9,000 |
| Paid-in Common Equity | $30,000 |
| Use of financial statements | ||
| 1. |
| |
|
| a. | Compute the firms debt ratio and current ratio.
Current Ratio =
Debt = CL + Long-term debt = Debt Ratio =
|
|
| b. | Is the firm profitable? Does the balance sheet balance? Explain.
|
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| c. | If the firm paid $5,000 in dividends in 2008, what was its retained earnings balance at the end of 2007?
RE08 = RE07 + NI08 D08 RE07 = RE08 NI08 + D08 = |
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