Participation Ex 2- GBC Managerial Accounting

Please find below the financial statements for Jane Wedding Centre

1. Please calculate the ratios below (show your calculations). You will probably need to research some of them:

	Jane's Last Year	Janes This Year
Current Ratio
Quick Ratio
Working Capital
Property and Equipment Turnover
Times Interest Earned
Debt-to-Assets Ratio
Profit Margin
Return on Assets
Return on Equity

1. Use your own words to describe the meaning of each ratio
2. List 3 questions based on the ratios you just calculated.

\begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{l} Jane Wedding Centre \\ Condensed Income Statement and \\ Statement of Retained Earnings and Investor Information \\ For the Periods Ending December 31, Last Year and This Year \end{tabular}} & \multicolumn{3}{|c|}{\begin{tabular}{l} Jane's Wedding Centre \\ Balance Sheets \\ December 31, Last Year and This Year \end{tabular}} \\ \hline \multirow[t]{2}{*}{ INCOME STATEMENT } & & & ASSETS & & \\ \hline & & & Current Assets & & \\ \hline Sales & 552,500 & 742,205 & Cash & 42,000 & 30,000 \\ \hline Cost of Sales & 227,075 & 259,800 & Marketable Securities & 93,000 & 80,000 \\ \hline Gross Profit & 325,425 & 482,405 & Net Receivables & 138,000 & 152,000 \\ \hline \begin{tabular}{l} Operating Expenses (Excluding \\ Depreciation) \end{tabular} & 160,225 & 280,275 & Inventories & 5,000 & 6,000 \\ \hline Depreciation & 60,000 & 59,000 & Total Current Assets & 278,000 & 268,000 \\ \hline Operating Income (EBIT) & 105,200 & 143,130 & & & \\ \hline Interest & 34,000 & 15,863 & Property and Equipment & 1,200,000 & 1,091,760 \\ \hline Income Before Income Taxes & 71,200 & 127,267 & Less Accumulated Depreciation & 200,000 & 141,000 \\ \hline Income Taxes (40\%) & 28,480 & 50,907 & Net Property and Equipment & 1,000,000 & 950,760 \\ \hline \multicolumn{6}{|c|}{\begin{tabular}{l} STATEMENT OF RETAINED EARNINGS AND \\ INVESTOR INFORMATION \end{tabular}} \\ \hline & & & LIABILITIES AND OWNERS' EQUITY & & \\ \hline Retained Earnings & & & Current Liabilities & & \\ \hline Retained Earnings, Beginning & 154,480 & 177,200 & Accounts Payable & 107,000 & 45,000 \\ \hline Net Income & 42,720 & 76,360 & Notes Payable & 15,000 & 59,000 \\ \hline Subtotal & 197,200 & 253,560 & Accrued Wages & 38,000 & 23,000 \\ \hline Cash Dividends Paid & 20,000 & 50,000 & Total Current Liabilities & 160,000 & 127,000 \\ \hline \multirow[t]{2}{*}{ Retained Earnings, Ending } & 177,200 & 203,560 & & & \\ \hline & & & Long-Term Liabilities & & \\ \hline Investor Information & & & Long-Term Debt & 340,800 & 138,200 \\ \hline Market Price per Share & $10.00 & $65.00 & Total Liabilities & 500,800 & 265,200 \\ \hline \multirow[t]{4}{*}{ Earnings per Share } & $1.42 & $6.07 & & & \\ \hline & & & Owners' Equity & & \\ \hline & & & Capital Stock & 600,000 & 750,000 \\ \hline & & & Retained Eamings & 177,200 & 203,560 \\ \hline \end{tabular}