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Requirement 1: Calculate the net income for a company with the following income statement: Revenue: $100,000 Cost of Goods Sold: $40,000 Operating Expenses: $20,000 Interest
Requirement 1: Calculate the net income for a company with the following income statement:
- Revenue: $100,000
- Cost of Goods Sold: $40,000
- Operating Expenses: $20,000
- Interest Expense: $3,000
- Tax Expense: $5,000
Requirement 2: Prepare a balance sheet for the company with the following details:
- Assets:
- Cash: $5,000
- Accounts Receivable: $10,000
- Inventory: $20,000
- Property, Plant, and Equipment: $50,000
- Liabilities:
- Accounts Payable: $7,000
- Notes Payable: $8,000
- Long-term Debt: $15,000
- Equity:
- Common Stock: $30,000
- Retained Earnings: $20,000
Requirement 3: Compute the company's key financial ratios:
- Current Ratio: (Current Assets / Current Liabilities)
- Quick Ratio: (Current Assets - Inventory) / Current Liabilities)
- Debt-to-Equity Ratio: (Total Liabilities / Total Equity)
- Return on Assets: (Net Income / Total Assets)
Requirement 4: Evaluate the company's financial health based on the ratios calculated.
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