The Balance Sheet and Income Statement Data for Galaxy Computer Co. is given below Income Statement BALANCE SHEET Sales 5.834.400 3,432,000 Assets 2001 2000 Cost of Goods Sold 5,728,000 2,864,000 Cash 7,282 9,000 Other expense 680,000 340,000 Short term investment 0 48,600 dep 116,960 18.900 EBIT/ LOSS -690,560 209,100 Acc. Receivable 632,160 351,200 Interest expense 176,000 62,500 Inventories 1,287,360 715,200 EBT/LOSS -866,560 146,600 Total current assets 1,926,802 1,124,000 tax -346624 58640 net income/loss -519.936 87,960 Fixed Assets Plant & Equipment 1,202,950 491,000 Less: Acc dep 263,160 146,200 939,790 Required: a) Compute at least two ratios in each area (numbered 1 to 6 below) for both years. (Note: Do not take average of two years to calculate any formula, work on individual year figure for all calculation. For example, do not take average inventory or average receivable) (3 Marks) 1. Liquidity 2. Profitability 3. Leverage 4. Efficiency ratio/Asset Activity 5. Coverage ratio 6. Market ratio 344,800 Total assets 2,866,592 1,468,800 Liabilities & Equities Current liability b) Based on your calculations in part a, interpret and give your comments about the company's liquidity, profitability, and solvency (2 Marks). A/c Payable 524,160 145,600 Notes payable 720,000 200,000 Accruals 489,600 136,000 total Current liability 1,733,760 481,600 Long-term debt 1,000,000 323,432 Common Stock 460,000 460,000 Retained Earning -327,168 203,768 The Balance Sheet and Income Statement Data for Galaxy Computer Co. is given below Income Statement BALANCE SHEET Sales 5.834.400 3,432,000 Assets 2001 2000 Cost of Goods Sold 5,728,000 2,864,000 Cash 7,282 9,000 Other expense 680,000 340,000 Short term investment 0 48,600 dep 116,960 18.900 EBIT/ LOSS -690,560 209,100 Acc. Receivable 632,160 351,200 Interest expense 176,000 62,500 Inventories 1,287,360 715,200 EBT/LOSS -866,560 146,600 Total current assets 1,926,802 1,124,000 tax -346624 58640 net income/loss -519.936 87,960 Fixed Assets Plant & Equipment 1,202,950 491,000 Less: Acc dep 263,160 146,200 939,790 Required: a) Compute at least two ratios in each area (numbered 1 to 6 below) for both years. (Note: Do not take average of two years to calculate any formula, work on individual year figure for all calculation. For example, do not take average inventory or average receivable) (3 Marks) 1. Liquidity 2. Profitability 3. Leverage 4. Efficiency ratio/Asset Activity 5. Coverage ratio 6. Market ratio 344,800 Total assets 2,866,592 1,468,800 Liabilities & Equities Current liability b) Based on your calculations in part a, interpret and give your comments about the company's liquidity, profitability, and solvency (2 Marks). A/c Payable 524,160 145,600 Notes payable 720,000 200,000 Accruals 489,600 136,000 total Current liability 1,733,760 481,600 Long-term debt 1,000,000 323,432 Common Stock 460,000 460,000 Retained Earning -327,168 203,768
