NEED Answers for PART -2

Part 2: Financial Statement Analysis

A. Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation needs to show the excel formula

Current ratio

Quick ratio

Inventory turnover (times)

Average collection period (days)

Total asset turnover (times)

Debt ratio

Times interest earned

Gross profit margin

Net profit margin

Return on total assets

Return on equity P/E ratio

Return on equity using DuPont Analysis

B. Comments on the ratios by comparing 2016 to 2017 ratios.

C. Assume Adams Stores, Inc. is a retail company similar to Walmart, Myers, or Target. Compare 2017 ratios to the industry average. Please note that Adams Stores, Inc. is not a real company. To find comparable industry ratios, you need to search for industry ratios for retail. See information on Moodle for instructions on how to find industry ratios. Based on the industry average, how is Adams Stores, Inc. doing financially?

Finance date of Adams Stores, Inc. for the year ending 2016 and 2017. Items Sales Cash Other Expenses Retained Earnings Long-term debt Cost of goods sold Depreciation Short-term investments Fixed Assets Interest Expenses Shares outstanding (par value = $46.00) Market Price of stock Accounts Receivable Accounts payable Inventory Notes Payable Accumulated Depreciation Accruals Tax Rate 2016 $3,432,000 9,000 340,000 203,768 323,432 2,864,000 18,900 48,600 491,000 62,500 2017 $5,834,400 7,282 720,000 97,632 1,000,000 4,980,000 116,960 20,000 1,202,950 176,000 100,000 8.50 351,200 145,600 715,200 200,000 146,200 136,000 40% 100,000 6 632,160 324,000 1,287,360 720,000 263,160 284,960 40% Instructions: As a group, complete the following activities using the financial information above: Part 1: Financial Statements A. Prepare the income statement for 2016 and 2017. Include statement of retained earnings for 2017. The company paid $11,000 dividend in 2017. B. Prepare the balance sheet for 2016 and 2017 C. Prepare Common-Size financial statements of income statement and balance sheet. D. Prepare Statement of Cash Flows. Finance date of Adams Stores, Inc. for the year ending 2016 and 2017. Items Sales Cash Other Expenses Retained Earnings Long-term debt Cost of goods sold Depreciation Short-term investments Fixed Assets Interest Expenses Shares outstanding (par value = $46.00) Market Price of stock Accounts Receivable Accounts payable Inventory Notes Payable Accumulated Depreciation Accruals Tax Rate 2016 $3,432,000 9,000 340,000 203,768 323,432 2,864,000 18,900 48,600 491,000 62,500 2017 $5,834,400 7,282 720,000 97,632 1,000,000 4,980,000 116,960 20,000 1,202,950 176,000 100,000 8.50 351,200 145,600 715,200 200,000 146,200 136,000 40% 100,000 6 632,160 324,000 1,287,360 720,000 263,160 284,960 40% Instructions: As a group, complete the following activities using the financial information above: Part 1: Financial Statements A. Prepare the income statement for 2016 and 2017. Include statement of retained earnings for 2017. The company paid $11,000 dividend in 2017. B. Prepare the balance sheet for 2016 and 2017 C. Prepare Common-Size financial statements of income statement and balance sheet. D. Prepare Statement of Cash Flows