https://www.chegg.com/homework-help/questions-and-answers/struggling-calculations-problems-someone-help-post-calculations-2015-analysis-balance-shee-q18095520

This is a follow up to my original question at the link above. I did not understand how the calculations were done. I see the formulas, but I don't see which values corresponded; my calculations look different. For example, the current ratio listed for 2015 is 1.1. When I calculate the current assets (147500)/current liabilities (862,500), I get a ratio of 1.7. Can you tell me what I'm doing wrong in the calculation?

Original question:

I am struggling with the calculations for these problems - can someone help post the calculations for 2015 and the analysis?

BALANCE SHEET		2015
Assets
Cash and Equivalents		$ 237,500.00
Accounts Receivable		$ 592,500.00
Inventory		$ 607,500.00
Total Current Assets		$ 1,437,500.00
Gross Fixed Assets	$ 1,250,000.00
Less Accumulated Depreciation	$ 187,500.00
Net Fixed Assets		$ 1,062,000.00
Total Assets		$ 2,500,000.00
Liabilities and Equity
Current Liabilities
Accounts Payable		$ 222,500.00
Notes Payable		$ 422,500.00
Accruals		$ 217,500.00
Total Current Liabilities		$ 862,500.00
Long Term Debt		$ 470,000.00
Total Liabilities		$ 1,332,500.00
Stockholder's Equity
Common Stock		$ 637,500.00
Retained Earnings		$ 530,000.00
Total Stockholders Equity		$ 1,167,500.00
Total Liabilities & Equity		$ 2,500,000.00
INCOME STATEMENT
Sales Revenue		$ 3,360,000.00
Cost of Sales		$ 2,724,960.00
Gross Profits		$ 635,040.00
Less: Operating Expenses
Selling Expense	$ 251,200.00
General S&A	$ 163,200.00
Depreciation	$ 48,000.00
Total Operating Expenses		$ 462,400.00
Total Operating Profit		$ 172,640.00
Less: Interest Expense		$ 31,200.00
Net Profits Before Taxes		$ 141,440.00
Less Taxes (40%)		$ 56,576.00
Net Profits After Taxes		$ 84,864.00
LIQUIDITY RATIOS		2013	2014	2015	Industry Average
Current Ratio		1.5	1.7		1.6
Quick Ratio		0.9	1		0.9
Operating Cash Flow		n/a	n/a
ASSET MANAGEMENT RATIOS		2013	2014	2015	Industry Average
Inventory Turnover		6	5		8.4
Average Collection Period		40	50		40
Fixed Asset Turnover		n/a	n/a
Total Asset Turnover		1.5	1.5		1.75
DEBT MANAGEMENT RATIOS		2013	2014	2015	Industry Average
Debt Ratio		60%	56%		50%
Times Interest Earned		2.5	3.5		4
PROFITABILITY RATIOS		2013	2014	2015	Industry Average
Gross Profit Margin		20%	19.70%		20%
Operating Profit Margin		4.70%	4.80%		6%
Net Profit Margin		2%	2.30%		3%
Return on Investment		3.00%	3.50%		5.25%
Return on Equity		7.50%	7.95%		10.50%

INSTRUCTIONS: Analyze the firm's performance from both time-series and cross-sectional points of view using the key financial ratios provided.

PROVIDE YOUR WRITTEN ANALYSIS IN THIS COLUMN.

First answer:

2015 COME STATEMENT 2015 BALANCE SHEET Gross Profits Accounts Receivable 592,500.00 635,040.00 Inventory 607.500.00 Total Current Assets 1,437,500.00 Less: Operating Expenses 1,250,000.00 Selling Expense 251,200.00 1,062,000.00 500,000.00 640.00 422,500.00 84,864.00 862,500.00 470,000.00 Long Term De Retained Earning 530,000.00 Total Stockholders Equit 1167 500.00 Total Liabilities & Equity 2,500,000.00 2013 2014 2015 Industry Average Formula LIQUIDITY RATIOS Current RatiO 1.7 1.1 1.6 Current AssetsCurrent Liabilities Quick Ratio 09 1 1.0 09 Liquid AssetsLiquid Liabilities Operating Cash Flo 2014 2015 ASSET MANAGEMENT RATIOS 2013 Industry Average Inventory Turnover 6 S 84 Sales Inventory Average collection perioc 40 50 64 40 Avg. ARISales Revenue x 365 na Fixed Asset Turnover Total Asset Turnover 1.5 1.5 13 1.75 Net SalesAvg Tota Assets DEBIT MANAGEMENT RATIOS 2013 20144 2015 Industry Average Debt Ratio 60% 56% 53 50% Total liabilities Total Assets 25 3.5 55 4 Times Interest Earned EBIT/Interest Expense PROFITABILITY RATIOS 2013 2014 2015 Industry Average Gross proft Margin 20% 1970% 19% 20% Grossproft/Total sales Operating Profit Margin .7056 48056 S14%d 6 operating income sales Net Profit Margin 2% 230% 253% 3% Net Profit Sales Return on Investment .000 35056 339%d s.256 Net Profit/Cost of Investment Analysis: The company should aim to keep its current ratio more than 1. If the Current ratio is 2 then the ratio is said to be ideal. But seeing the industry standard, here we can conclude the company has been able to retain its liquidity and abi to meet its working capital requirements quite effectively The Asset management ratios measures the ability of a company to manage its assets. Here the company need to improve its Accounts receivable ensure smooth flow of funds. Otherwise the company has been able to sustain itself to industry standards which means that mechanism to the company is fair n its management towards AR/AP The Debt Ratio is solvancy ratio that measures the company's effectiveness and capacity to meet its Long term and shorm debts and liabilities Heretoo the company seem to be improving its effectiveness over years in maintaining its financial leverage. But it should not allow its liabilities go beyond 50% of its assets. The company has been able to retain its profitability at a fixed trend although it is below industry standards. Hence it should try to put an effective management over its operating expenses