Protected view) Microsoft Word Product Action erences Mailings Review View net location and might be unsafe. Click for more details. Enable Editing Chapter 3 Review 1) BC Logging Corporation's 2020 income statement and balance sheet are found below: BC Logging Corporation Balance Sheet For the Year Ended December 31, 2018 2018 2017 Assets Current Assets Cash and cash equivalents 105,000 98,000 Investments 15,000 10,000 Accounts Receivable 125,000 110,000 Inventory 58,000 48,000 Total Current Assets 303,000 266,000 Non-Current Assets Investments 75,000 50,000 PPE (net) 1,300,000 1,350,000 Total non-Current Assets 1,375,000 1,400,000 Total Assets 1,678,000 1,666,000 Liabilities and Shareholders Equity Current Liabilities Accounts Payable 200,000 230,000 Accrued Liabilities 50,000 65,000 Unearned Revenue 12,000 8,000 Current Portion of LT Debt 18,500 25,000 Total Current Liabilities 280,500 328,000 Non-Current Liabilities Long Term Debt 650,000 700,000 Total Liabilities 930,500 1,028,000 _7946.jpg IMG_7945.jpg IMG_7944.jpg might be unsafe. Click for more details. Enable Editing 200,000 50,000 12,000 18,500 280,500 230,000 65,000 8,000 25,000 328,000 650,000 700,000 930,500 1,028,000 Liabilities and Shareholders Equity Current Liabilities Accounts Payable Accrued Liabilities Unearned Revenue Current Portion of LT Debt Total Current Liabilities Non-Current Liabilities Long Term Debt Total Liabilities Shareholders Equity Contributed Capital Common Shares, 120,000 shares authorized 70,000 issued and outstanding Preferred Shares, 50.5, cumulative, 45,000 outstanding Total Contributed Capital Retained Earnings Total Shareholder's Equity Total Liabilities and Shareholder's Equity 465,000 465,000 110,000 60,000 575,000 525,000 172,500 113,000 747,500 638,000 1,678,000 1,666,000 Mailings Review View and might be unsafe. Click for more details. Enable Editing BC Logging Corporation Income Statement For the year ended December 31, 2018 2018 2017 2016 Sales 890,000 750,000 600,000 Cost of Goods Sold 600,000 545,000 436,000 Gross Profit 290,000 205,000 164,000 Selling and Admin Costs 195,000 145,000 116,000 Profit From Operations 95,000 60,000 48,000 interest Expense 4,900 4,500 3,600 Profit Before taxes 91,100 55,500 44,400 Income Tax Expense 27,330 16,650 13,320 Net Profit 63,770 38,350 30,680 . . a) Calculate the following ratios and explain whether it is increasing or decreasing profitablility. Cost of goods sold to sales Selling and Admin costs to Sales Interest Expense to sales Profit Margin Return on Assets Return on Shareholder's Equity Asset Turnover Ratio aces View . . Mailings Review location and might be unsafe. Click for more details Enable Editing COSTOrgos sold to stales . Selling and Admin costs to Sales Interest Expense to sales Profit Margin Return on Assets Return on Shareholder's Equity Asset Turnover Ratio b) Compute the following ratios for 2018 and 2017 explain whether the trend is favourable or unfavourable Inventory turnover AR Turnover Current Ratio Quick Ratio Debt to Assets Ratio Interest Coverage Fixed Charge Coverage 2) Craigco is interested in expanding its business. The expansion will require an investment in assets of $800,000, it is expected to generate $2.3 million in annual sales with a 5% profit margin. What is yearly net income and return on assets for the investment? 3) ABC Corporation has assets of $6.5 million and turns over its assets 1.45 times. Return on assets is 6.5%. What is the firm profit margin? What are its total sales? 4) 123 Corporation has assets of $4.5 million and turns over its assets 1.8 times during the year. Return on assets is 10%. What is their profit margin? . 6.jpg IMG_7945.jpg IMG_7944.jpg RI ChapterReview Protected Vie) - Microsoft Word Product Activation Failed References Mailings Review View Internet location and might be unsafe. Click for more details. Enable Editing 5) An investor is looking to invest money.He has narrowed his investment choices down to two companies in the same industry. He argues that company A is a better investment than Company B because it has higher total profits. Based on the information supplied below, explain why you agree or disagree with his investment choice. Sales Profits Cost of Goods sold Total Assets Total Liabilities Shares outstanding Company A $ $ $ $ $ 4,500,000.00 250,000.00 2,500,000.00 12,500,000.00 7,500,000.00 450,000.00 Sales Profits Cost of Goods sold Total Assets Total Liabilities Shares outstanding Company B $ 2,500,000.00 $ 150,000.00 $ 975,000.00 $ 6,500,000.00 $ 2,000,000.00 175,000.00