Problem:

JDB Company is a manufacturing company of gadgets and operating its business for $2$ years. The

company set its standards and policies to achieve its goals and be one of the leading manufacturing

companies in the nation. The company wishes to have at least $15\%$ profit margin to achieve one of

its goals.

The executive management asked for your financial statement analysis and make recommendations

on how the company can maintain achieving its goal regarding its profit margin consideration.

Additional information:

The useful life of depreciable assets is equal to $20$ years without salvage value except for

service vehicle that has $10$ years useful life.

Bonds payable are to be paid within $10$ years, $10$ equal installment payment of $P500,000$

annually.

Commission expense is equal to $3\%$ of gross sales.

Tax expense is equal to $10\%$ of income before tax expense.

REQUIREMENTS:

Prepare the financial statement for the year $2022$ and $2023.$

Provide the vertical and horizontal analysis for the year $2022$ and $2023.$

Provide the financial ratio of the following for the year $2023$

a$.$ Current ratio

b$.$ Acid$-$test ratio

c$.$ Cash ratio

d$.$ Debt ratio

e$.$ Debt to equity ratio

f$.$ Asset turnover ratio

g$.$ Inventory turnover ratio

h$.$ Receivables turnover ratio

i$.$ Days sales in inventory ratio

j$.$ Gross margin ratio

k$.$ Return on asset ratio

What is the profit margin for the year $2023?$

Make recommendations to the management about the result of your analysis to achieve its

goals for the year $2024.$