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QUESTION 1 The Garvey Company has the following financial statements. Garvey Company Balance Sheet For the period ended 12/31/X1 ($000) ASSETS 12/31/X0 12/31/X1 Cash $

QUESTION 1

  1. The Garvey Company has the following financial statements.

Garvey Company

Balance Sheet

For the period ended 12/31/X1 ($000)

ASSETS

12/31/X0

12/31/X1

Cash

$

3547

$

2855

Accounts receivable

6579

5217

Inventory

2573

3220

CURRENT ASSETS

$

12699

$

11292

Fixed assets

Gross

$

22478

$

24360

Accumulated deprec.

(12017)

(12927)

Net

$

10461

$

11433

TOTAL ASSETS

$

23160

$

22725

LIABILITIES

Accounts payable

$

1577

$

1710

Accruals

233

380

CURRENT LIABILITIES

$

1810

$

2090

Long-term debt

$

7112

$

6002

Equity

14238

14633

TOTAL CAPITAL

$

21350

$

20635

TOTAL LIABILITIES AND EQUITY

$

23160

$

22725

Garvey Company

Income Statement

For the period ended 12/31/X1

($000)

Sales

$

36233

COGS

20315

Gross margin

$

15918

Expense

$

10478

EBIT

$

5440

Interest

713

EBT

$

4727

Tax

1605

Net income

$

3122

  1. In addition, Garvey retired stock for $1,000,000 and paid a dividend of $1,727,000. Depreciation for the year was $910,000. Calculate the ratios for the Garvey Company. Assume Garvey had leasing costs of $7,267,000 and amortization of $1,416,000 in 20X1, and had 1268000 shares of stock outstanding that were valued at $28.75 per share at year end. The firm must also make principal repayments of $1,012,000 on its outstanding debt this year. Assume 360 days in a year. Round your answers to two decimal places.

Current Ratio

x

Quick Ratio

x

Average Collection Period (ACP)

days

Inventory Turnover (using COGS)

x

Inventory Turnover (using sales)

x

Fixed Asset Turnover

x

Total Asset Turnover

x

Debt Ratio

%

Debt to Equity Ratio

x

Times Interest Earned (TIE)

x

Cash Coverage

x

Fixed Charge Coverage

x

EBITDA Coverage

x

Return on Sales

%

Return on Assets

%

Return on Equity

%

Price Earnings Ratio (P/E)

x

Market to Book Value Ratio

x

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