Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with A & B. will upvote - -- VERA J UU UL LOlal d55e15: 8. (Ratio Calculations from Financial Statements) Ricardo Martinez has

image text in transcribed

image text in transcribed

please help with A & B. will upvote

- -- VERA J UU UL LOlal d55e15: 8. (Ratio Calculations from Financial Statements) Ricardo Martinez has prepared the following financial statement projections as part of his business plan for starting the Martinez Products Corporation. The venture is to manufacture and sell electronic components that make standard overhead projectors "smart." In essence, through voice commands, a projector can be turned on, off, and the brightness of the projection altered. This will allow the user to avoid audience annoyances associated with a bright projection light during periods when no overhead transparency is being used. Venture investors usually screen prospective venture opportunities in terms of projected profitability and financial performance. A. Use the following projected financial statements for Martinez Products to calculate financial ratios show- ing the venture's projected (a) gross profit margin, (b) net profit margin, (c) asset intensity, and (d) ROA. B. The ratios calculated in Part A are found in the venture opportunity screening guide discussed in the chapter. Rate the potential attractiveness of the Martinez Products venture using the guidelines for the pricing/profitability factor category for the VOS Indicator". MARTINEZ PRODUCTS CORPORATION PROJECTED INCOME STATEMENT FOR YEAR 1 Sales Cost of goods sold Gross profit Operating expenses Depreciation Earnings before interest and taxes Interest Earnings before taxes Taxes (25%) Net income $200,000 100,000 100,000 75,000 4,000 21.000 1,000 20,000 5,000 $ 15,000 MARTINEZ PRODUCTS CORPORATION PROJECTED BALANCE SHEET FOR END OF YEAR 1 $ 15,000 10,000 10,000 35,000 Cash Accounts receivable Inventories Total current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets $ 10,000 20,000 20,000 50,000 54,000 4,000 50,000 $100,000 Accounts payable Accrued liabilities Bank loan Total current liabilities Common stock Retained earnings Total equity Total liabilities and equity 50.000 15,000 65,000 $100,000

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

Introduction to Finance Markets Investments and Financial Management

Authors: Melicher Ronald, Norton Edgar

15th edition

9781118800720, 1118492676, 1118800729, 978-1118492673

More Books

Students also viewed these Finance questions