Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show what steps you took for each ratio and how you got the industry average for actual 2015 also part A and B please

please show what steps you took for each ratio and how you got the industry average for "actual 2015" also part A and B image text in transcribed
image text in transcribed
please calculate the ratios, "current ratio all the way through market/book value", for the actual 2015 column, and show work on how you got the answer , and which numbers you used for each ratio computation, using the information from the "Zach industries income and balance statement".
GO P3-24 Financial statement analysis The financial statements of Zach Industries for the year ended December 31, 2015, follow. Zach Industries Income Statement for the Year Ended December 31, 2015 $160,000 106,000 $ 54,000 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes Net profits after taxes $ 16,000 10,000 1,000 10,000 $ 37,000 $ 17,000 6,100 $ 10,900 4,360 $ 6,540 PART 2 Financial Tools Zach Industries Balance Sheet December 31, 2015 Assets Cash $ 500 Marketable securities 1,000 Accounts receivable 25.000 Inventaris 45.500 Total current assets $ 72,000 Land $ 26,000 Buildings and equipment 90.000 Less: Accumulated depreciation 38.000 Net fixed assets $ 78,000 Total assets $150.000 Liabilities and Stockholders' Equity Accounts payable $ 22.000 Notes payable 47,000 Total current liabilities $ 69,000 Long-term debe 22,950 Common stock 31,500 Retained earnings 26.550 Total liabilities and stockholders' equiry $ 150,000 "The firm' 3,000 outstanding shares of common stock closed 2015 at a price of $25 per dare a. Use the preceding financial statements to complete the following table. Assume that the industry averages given in the table are applicable for both 2014 and 2015. (Quick ratio Ratio Current ratio Lig Inventory turnover actiu Average collection period Debt ratio aubt ( Times interest earned ratio Gross profit margin Net profit margin Return on total assets Return on common equity market Market/book ratio Industry average 1.80 0.70 2.50 37.5 days 65% 3.8 38% 3.5% 4.0% 9.5% 1.1 Actual 2014 Actual 2015 1.84 0.78 2.59 36.5 days 67% 4.0 40% 3.6% 4.0% 8.0% 1.2 protititions "Based on a 365-day year and on end-of-year figures. b. Analyze Zach Industries' financial condition as it is related to (1) liquidity, (2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company's overall financial condition

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

Cryptoasset Inheritance Planning A Simple Guide For Owners

Authors: Pamela Morgan ,Andreas M. Antonopoulos

1st Edition

1947910116, 978-1947910119

More Books

Students also viewed these Finance questions

Question

How are resource prices determined?

Answered: 1 week ago