Question
Given the information below, calculate- 1. Debt-EquityRatio(Bookvalues) 2.ROE(usebookvalueforequity). XYZ BalanceSheet Assets Currentassets: 2020 2021 change Cash 1,500,000 1,800,000 300,000 Investments 1,000,000 1,025,000 25,000 Inventories 112,000,000
Given the information below, calculate- 1. Debt-EquityRatio(Bookvalues) 2.ROE(usebookvalueforequity).
XYZ | BalanceSheet | ||
Assets | |||
Currentassets: | 2020 | 2021 | change |
Cash | 1,500,000 | 1,800,000 | 300,000 |
Investments | 1,000,000 | 1,025,000 | 25,000 |
Inventories | 112,000,000 | 127,000,000 | 15,000,000 |
Accountsreceivable | 11,950,000 | 12,500,000 | 550,000 |
Pre-paidexpenses | 2,500,000 | 2,650,000 | 150,000 |
Other | 0 | 0 | |
Totalcurrentassets | 128,950,000 | 144,975,000 | 16,025,000 |
Fixedassets: | 2020 | 2021 | change |
Propertyandequipment | 155,000,000 | 172,500,000 | 17,500,000 |
Leaseholdimprovements | 0 | 0 | 0 |
Equityandotherinvestments | 48,000,000 | 57,000,000 | 9,000,000 |
Totalfixedassets | 203,000,000 | 229,500,000 | 26,500,000 |
Otherassets: | 2020 | 2021 | change |
Goodwill | 85,000,000 | 70,000,000 | -15,000,000 |
Totalotherassets | 85,000,000 | 70,000,000 | -15,000,000 |
Totalassets | 416,950,000 | 444,475,000 | 27,525,000 |
Liabilitiesandowner'sequity | |||
Currentliabilities: | 2020 | 2021 | change |
Accountspayable | 38,500,000 | 43,200,000 | 4,700,000 |
Accruedwages | 75,000,000 | 80,500,000 | 5,500,000 |
Accruedcompensation | 10,000,000 | 10,255,000 | 255,000 |
Incometaxespayable | 4,024,000 | 4,697,000 | 673,000 |
currentportionofLT debt | 5,000,000 | 5,350,000 | 350,000 |
Other | 0 | 0 | 0 |
Totalcurrentliabilities | 132,524,000 | 144,002,000 | 11,478,000 |
Long-termliabilities: | 2020 | 2021 | change |
Longtermdebt | 115,000,000 | 130,000,000 | 15,000,000 |
Totallong-termliabilities | 115,000,000 | 130,000,000 | 15,000,000 |
Owner'sequity: | 2020 | 2021 | change |
Commonstock | 122,000,000 | 122,000,000 | 0 |
Preferredstock | 16,725,000 | 16,725,000 | 0 |
Accumulatedretainedearnings | 30,701,000 | 31,748,000 | 1,047,000 |
Totalowner'sequity | 169,426,000 | 170,473,000 | 1,047,000 |
Totalliabilitiesandowner'sequity | 416,950,000 | 444,475,000 | 27,525,000 |
Financial Statements in '000s of U.S. Dollars
Revenue
Gross Sales 282,000 Less: Sales Returns and Allowances 2,500
Net Sales 279,500
Cost of Goods Sold
Beginning Inventory 7,500
Add: Purchases 4,500
Freight-in -
Direct Labor 75,000
Indirect Expenses 15,000
Inventory Available 102,000
Less: Ending Inventory
Cost of Goods Sold 102,000
Gross Profit (Loss) 145,500
Expenses
Advertising 18,500
Amortization -
Bad Debts 5,000
Depreciation 500
Dues and Subscriptions -
Employee Benefit Programs 18,750
Insurance 2,500
Interest 10,350
Legal and Professional Fees 100
Licenses and Fees -
Miscellaneous 10
Office Expense 100
Payroll Taxes 5,625
Postage 3
Rent - Repairs and Maintenance 5,000
Supplies 2,000
Telephone 120
Travel 1,750
Utilities 70,000
Vehicle Expenses 450
Wages 25,000
Total Expenses 164,758
Net Operating Income 12,742 Other Income
Gain (Loss) on Sale of Assets -
Interest Income 1,000
Total Other Income 1,000
Taxes 4,697
Net Income (Loss) 9,045
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