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Who do u know this problem? Can u help me to solve it? BC 15-43 Bonus Chapter 15 How Well Am I Doing? Financial Statement

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BC 15-43 Bonus Chapter 15 "How Well Am I Doing?" Financial Statement Analysis Required: Indicate the effect that each transaction or event would have on the ratio listed opposite to it. State the effect in terms of increase, decrease, or no effect on the ratio involved, and give the reason for your choice. In all cases, assume that the current assets exceed current liabilities both before and after the event or transaction. Use the following format for your answers: Effect on Ratio 1. Reason for Increase, Decrease, or No Effect 2. Etc. PROBLEM 15-16 Comprehensive Problem-Part 1: Financial Ratios for Common Shareholders (Problems 15-17 and 15-18 delve more deeply into the data presented below. Each problem is independent.) Microswift, Inc. was organized several years ago to develop and market computer software programs. The company is small but growing, and you are considering the purchase of some of its common shares as an investment. The following data on the company are available for the past two years: MICROSWIFT, INC. Comparative Income Statement For the Years Ended December 31, This Year and Last Year Sales. Less cost of goods sold Gross margin Less operating expenses Net operating income Less interest expense. Net income before taxes Less income taxes (30%) Net income . . This Year Last Year $10,000,000 $7,500,000 6,500,000 4,500,000 3,500,000 3,000,000 2,630,000 2,280,000 870,000 720,000 120,000 120,000 750,000 600,000 225,000 180,000 $ 525,000 $ 420,000 MICROSWIFT, INC. Comparative Retained Earnings Statement For the Years Ended December 31, This Year and Last Year Retained earnings, January 1 Add net income (above) Total.. Deduct cash dividends paid: Preferred dividends. Common dividends This Year $1,200,000 525,000 Last Year $ 980,000 420,000 1,400,000 1,725,000 60,000 60,000 180,000 140,000 Total dividends paid. . . 240,000 200,000 Retained earnings, December 31 $1,485,000 $1,200,000 MICROSWIFT, INC. Comparative Balance Sheet December 31, This Year and Last Year Assets This Year Last Year Current assets: Cash Accounts receivable, net. Inventory $ 100,000 750,000 1,500,000 $ 200,000 Prepaid expenses 50,000 400,000 600,000 50,000 Total current assets. 2,400,000 1,250,000 Plant and equipment, net 2,585,000 2,700,000 Total assets. . $4,985,000 $3,950,000 continued

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