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41) After taking a look at your resulting financial statement below, how would you assess the overall financial position of your company? Using any 3 financial ratios, provide commentary on the profitability, liquidity and solvency of this company. Provide a recommendation on how the company can improve its financial position where needed.

41) After taking a look at your resulting financial statement below, how would you assess the overall financial position of your company? Using any 3 financial ratios, provide commentary on the profitability, liquidity and solvency of this company. Provide a recommendation on how the company can improve its financial position where needed.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Clipboard Formatting Table Font Alignment Number Styles A78 which can be considered satisfactory. A. B 100 DO NOT CHANGE ANYTHING IN THE FINANCIAL STATEMENTS. RESULTS WILL AUTOMATICALLY POPULATE. H. D F 101 102 103 Company Ltd. Balance Sheet O Company Ltd. Income Statement At December 31, 2021 104 For the Quarter Ending December 31, 2021 105 ASSETS 106 Current Assets: REVENUE 107 Cash Sales Revenue 24 800,000.00 80,010.56 Sales Returns 3,458.00 108 Accounts Receivable 109 Allowance for Doubtful Accounts 20,500.00 Sales Discounts 925.00 $4 615.00 Net Sales 795,617.00 110 Net Accounts Receivable 111 Inventory 112 Cash Equivalents 19,885.00 125,000.00 670,617.00 63,000.00 Inventory Used 113 Total Current Assets 5,986.75 Gross Profit %24 168,882.31 114 115 Long-Lived (Fixed) Assets: 116 Buildings 117 Less Accumulated Depreciation Buildings EXPENSES Sales and Admin Expenses: 225,000.00 2$ Advertising 25,000.00 195,840.00 Rent 90,000.00 118 Net Book Value Buildings 2$ 29,160.00 Office Supplies 8,000.00 119 120 Property and Equipment 121 Less Accumulated Depreciaton P&E 122 Net Book Value P&E 123 124 Total Long-Lived (Fixed) Assets 125 126 TOTAL ASSETS Wages 156,000.00 316,000.00 Total S & A Expenses 279,000.00 142,595.00 173,405.00 Operating Income 391,617.00 24 202,565.00 Other Revenue & Expenses Rental Revenue 24 3,000.00 371,447.31 Irest Expense 656.25 127 Depreciation Expense 15,000.00 128 LIABILITIES Income Tax Expense 39,161.70 129 Current Liabilities: 130 Accounts Payable 7,500.00 NET INCOME (PROFIT/LOSS) 339,799.05 %24 16,505.00 131 Unearned Revenue 132 Accrued Interest Payable 133 Notes Payable 134 Total Current Liabilities 2$ 1,750.00 75,000.00 %24 100,755.00 135 136 Long-Term Liabilities 137 Loan Payable 138 Bonds Payable 139 Total Long-Term Liabilities 3,000.00 24 60,000.00 63,000.00 140 163,755.00 141 TOTAL LIABILITIES 142 143 144 EQUITY 145 24 200,000.00 146 Common Shares 147 Retained Earnings 148 149 TOTAL EQUITY 7,692.31 207,692.31 150 371,447.31 151 TOTAL LIABILITIES AND EQUITY 152 153
Transcribed Image Text:Clipboard Formatting Table Font Alignment Number Styles A78 which can be considered satisfactory. A. B 100 DO NOT CHANGE ANYTHING IN THE FINANCIAL STATEMENTS. RESULTS WILL AUTOMATICALLY POPULATE. H. D F 101 102 103 Company Ltd. Balance Sheet O Company Ltd. Income Statement At December 31, 2021 104 For the Quarter Ending December 31, 2021 105 ASSETS 106 Current Assets: REVENUE 107 Cash Sales Revenue 24 800,000.00 80,010.56 Sales Returns 3,458.00 108 Accounts Receivable 109 Allowance for Doubtful Accounts 20,500.00 Sales Discounts 925.00 $4 615.00 Net Sales 795,617.00 110 Net Accounts Receivable 111 Inventory 112 Cash Equivalents 19,885.00 125,000.00 670,617.00 63,000.00 Inventory Used 113 Total Current Assets 5,986.75 Gross Profit %24 168,882.31 114 115 Long-Lived (Fixed) Assets: 116 Buildings 117 Less Accumulated Depreciation Buildings EXPENSES Sales and Admin Expenses: 225,000.00 2$ Advertising 25,000.00 195,840.00 Rent 90,000.00 118 Net Book Value Buildings 2$ 29,160.00 Office Supplies 8,000.00 119 120 Property and Equipment 121 Less Accumulated Depreciaton P&E 122 Net Book Value P&E 123 124 Total Long-Lived (Fixed) Assets 125 126 TOTAL ASSETS Wages 156,000.00 316,000.00 Total S & A Expenses 279,000.00 142,595.00 173,405.00 Operating Income 391,617.00 24 202,565.00 Other Revenue & Expenses Rental Revenue 24 3,000.00 371,447.31 Irest Expense 656.25 127 Depreciation Expense 15,000.00 128 LIABILITIES Income Tax Expense 39,161.70 129 Current Liabilities: 130 Accounts Payable 7,500.00 NET INCOME (PROFIT/LOSS) 339,799.05 %24 16,505.00 131 Unearned Revenue 132 Accrued Interest Payable 133 Notes Payable 134 Total Current Liabilities 2$ 1,750.00 75,000.00 %24 100,755.00 135 136 Long-Term Liabilities 137 Loan Payable 138 Bonds Payable 139 Total Long-Term Liabilities 3,000.00 24 60,000.00 63,000.00 140 163,755.00 141 TOTAL LIABILITIES 142 143 144 EQUITY 145 24 200,000.00 146 Common Shares 147 Retained Earnings 148 149 TOTAL EQUITY 7,692.31 207,692.31 150 371,447.31 151 TOTAL LIABILITIES AND EQUITY 152 153
81 4H) Now consider the position of your company if cash was $3,000? 82 What would your Quick Ratio be? 83 Explain what this means, how this impacts your financial position, and what can be done to improve the situation if improvement is necessary: 84 85 86 87 88 89 90 91 41) After taking a look at your resulting financial statement below, how would you assess the overall financial position of your company? 92 Using any 3 financial ratios, provide commentary on the profitability, liquidity and solvency of this company. Provide a recommendation on how the company can improve its financial position where needed. 93 94 95 96 97
Transcribed Image Text:81 4H) Now consider the position of your company if cash was $3,000? 82 What would your Quick Ratio be? 83 Explain what this means, how this impacts your financial position, and what can be done to improve the situation if improvement is necessary: 84 85 86 87 88 89 90 91 41) After taking a look at your resulting financial statement below, how would you assess the overall financial position of your company? 92 Using any 3 financial ratios, provide commentary on the profitability, liquidity and solvency of this company. Provide a recommendation on how the company can improve its financial position where needed. 93 94 95 96 97
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