XYZ Balance Sheet

Assets:

Cash and marketable securities $300,000

Accounts receivable 1,125,000

Inventories 1,837,500

Prepaid expenses 24,000

Total current assets $3,286,500

Fixed assets 2,700,000

Less: accumulated depreciation 1,087,500

Net fixed assets $1,612,500

Total assets $4,899,000

Liabilities:

Accounts payable $240,000

Notes payable 825,000

Accrued taxes 42,000

Total current liabilities $1,107,000

Long-term debt 975,000

Owners equity 2,817,000

Total liabilities and owners equity $4,899,000

XYZ Income Statement

Net sales (all credit) $6,375,000

Less: Cost of goods sold 4,312,500

Selling and administrative expense 1,387,500

Depreciation expense 135,000

Interest expense 127,000

Earnings before taxes $ 412,500

Income taxes 225,000

Net income $ 188,000

Common stock dividends $ 97,500

Change in retained earnings $ 90,500

Determine the following financial ratios. Please interpret them.

1. Current Ratio
2. Debt ratio
3. Average collection period (utilizando un ao de 365 das)
4. Times Interest Earned
5. Gross Profit Margin
6. Operational Profit Margin
7. Net Profit Margin
8. Inventory Turnover
9. Fixed Asset Turnove
10. Gross Profit Margin
11. Return on Equity