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Requirement 1: Calculate the net income for a company with the following income statement: Revenue: $120,000 Cost of Goods Sold: $48,000 Operating Expenses: $24,000 Interest
Requirement 1: Calculate the net income for a company with the following income statement:
- Revenue: $120,000
- Cost of Goods Sold: $48,000
- Operating Expenses: $24,000
- Interest Expense: $3,400
- Tax Expense: $5,800
Requirement 2: Prepare a balance sheet for the company with the following details:
- Assets:
- Cash: $6,200
- Accounts Receivable: $11,600
- Inventory: $22,400
- Property, Plant, and Equipment: $54,000
- Liabilities:
- Accounts Payable: $7,800
- Notes Payable: $9,200
- Long-term Debt: $17,000
- Equity:
- Common Stock: $33,200
- Retained Earnings: $22,400
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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