HW 1D

Question 3

American Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, calculate the firm's the net-working capital - to-sales ratio.

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Balance Sheet December 31, 2010

Cash and marketable securities $102,000Accounts payable$287,000

Accounts receivable $299,000Notes payable $61,200

Inventories $628,000 Accrued expenses $51,900

Prepaid expenses $10,300 Total current liabilities $400,100

Total current assets $1,039,300Long-term debt $415,000

Gross fixed assets $1,502,000Par value and paid-in-capital $376,000

Less: accumulated depreciation $312,000Retained Earnings $1,038,200

Net fixed assets$1,190,000 Common Equity $1,414,200

Total assets $2,229,300 Total liabilities and owner's equity $2,229,300

Income Statement, Year of 2010

Net sales (all credit) $6,387,700.00

Less: Cost of goods sold $4,726,898.00

Selling and administrative expenses $345,000.00

Depreciation expense $148,000.00

EBIT $1,167,802.00

Interest expense $50,600.00

Earnings before taxes $1,117,202.00

Income taxes $446,880.80

Net income$670,321.20

Your Answer: