Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with question 3, see data belon the question 3. [Financial Statements and Ratios) Bike-With-Us Corporation, a specialty bicycle parts replacement venture, was

i need help with question 3, see data belon the question image text in transcribed
image text in transcribed
3. [Financial Statements and Ratios) Bike-With-Us Corporation, a specialty bicycle parts replacement venture, was started last year by two former professional cyclists who had substantial competitive racing experience, including the Tour de France. The two entrepre- neurs borrowed $50,000 from members of their families, and each put up $30,000 in equity capital. Retail space was rented, and $60,000 was spent for fixtures and store equipment. Following is the abbreviated income statement and balance sheet information for the Bike With-Us Corporation after one year of operation. Chapter 5 Evaluating Operating and Financial Performance BIKE-WITH-US CORPORATION Sales $325,000 Operating costs 285,000 Depreciation 10,000 Interest 5,000 Taxes 6,000 Cash $1,000 Receivables 30,000 Inventories 50,000 Fixed assets, net 50,000 Payables 11,000 Accruals 10,000 Long-term loan 50,000 Stockholders'equity 60,000 A. Prepare an income statement and a balance sheet for the Bike-With-Us Corporation using only the information provided above. B. Calculate the current ratio, quick ratio, and NWC-to-total-assets ratio. C. Calculate the total-debt-to-total-assets ratio, debt-to-equity ratio, and interest coverage. D. Calculate the net profit margin, sales-to-total-assets ratio, and the return on assets. E. Calculate the equity multiplier. Combine this calculation with the calculations in Part D to show the ROE model with its three components. toment data for the Bike-With-Us Corporation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Selected Works Of George J. Benston Banking And Financial Services Volume 1

Authors: James D. Rosenfeld

1st Edition

0195389018, 0199745471, 9780199745470

More Books

Students also viewed these Finance questions