Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Please show work on paper for part A. Thank You, will give a thumbs up! P24.3(LO6,8) Excel (Ratio Computations and Additional Analysis) Bradburn Corporation was

image text in transcribedimage text in transcribedimage text in transcribed

Please show work on paper for part A. Thank You, will give a thumbs up!

P24.3(LO6,8) Excel (Ratio Computations and Additional Analysis) Bradburn Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two \$35,000 notes, which are due on June 30, 2021, and September 30, 2021. Another note of \$6,000 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn's cash flow problems are due primarily to the company's desire to finance a $300,000 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. a Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021 . a Depreciation charges on the plant and equipment of $100,000 and $102,500 for fiscal years ended March 31, 2020 and 2021, respectively, are included in cost of goods sold. Instructions a. Compute the following items for Bradburn Corporation. 1. Current ratio for fiscal years 2020 and 2021. 2. Acid-test (quick) ratio for fiscal years 2020 and 2021. 3. Inventory turnover for fiscal year 2021. 4. Return on assets for fiscal years 2020 and 2021. (Assume total assets were $1,688,500 at 3/31/19.) 5. Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 202 c. Assume that the percentage changes experienced in fiscal year 2021 as compared with fiscal year 2020 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn's desire to finance the plant expansion from internally generated funds realistic? Discuss

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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