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Given the profit loss (income statement) and balance sheet for Sam’s Sandwich Delivery (Table 4–8), answer the following:  Calculate the current and quick ratios. Using the inventory figure on the balance sheet as average inventory, calculate the inventory turnover ratio. Calculate the debt-to-equity ratio, debt-to-total-asset ratio, and operating profit margin ratio.

Given the profit loss (income statement) and balance sheet for Sam’s Sandwich Delivery (Table 4–8), answer the following:  Calculate the current and quick ratios. Using the inventory figure on the balance sheet as average inventory, calculate the inventory turnover ratio. Calculate the debt-to-equity ratio, debt-to-total-asset ratio, and operating profit margin ratio.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Given the profit loss (income statement) and balance sheet for Sam’s Sandwich Delivery (Table 4–8), answer the following: 

  1. Calculate the current and quick ratios.
  2. Using the inventory figure on the balance sheet as average inventory, calculate the inventory turnover ratio.
  3. Calculate the debt-to-equity ratio, debt-to-total-asset ratio, and operating profit margin ratio.
  4. Perform a vertical analysis of the income statement.
  5. Perform a vertical analysis of the balance sheet.
  6. Based on your analysis, would you consider investing in Sam’s Sandwich Delivery?
TABLE 4-8 Financial Statements for Sam's Sandwich Delivery Profit Loss (Income Statement) for Six Months Ending June 30, 2013 Revenues Retail Sales Wholesale Sales $68,283 104.417 Total Revenues Cost of Sales Gross Profit $172,700 52,067 $120,633 Total Operating Expenses Operating Profit Other Income/Expenses Interest Income Interest Expense Depreciation-Store Equipment Total Other Income/Expenses Net Profit 111,117 $ 9,516 41 (651) (292) (902) $ 8,614 Balance Sheet as of 06-30-2013 Assets Current Assets $ Change Fund Cash in Bank-Checking Cash in Bank-Savings Accounts Receivable 569 8,612 9,622 6,843 2,607 Inventories Total Current Assets $28,253 Fixed Assets Furniture and Fixtures Less: Accum Depreciation Equipment Less: Accum Depreciation Transportation Equipment Less: Accum Depreciation Total Fixed Assets Total Assets 4,296 4,110 68,293 67,725 31,168 11,571 186 568 19,597 $20,351 $48,604 Current Liabilities Accounts Payable Trade Accrued Payroll Taxes Accrued Sales Taxes 6,208 3,464 987 Total Current Liabilities $10,659 Long-Term Liabilities Auto Loans Payable Total Long-Term Liabilities Total Liabilities Stockholder's Equity Common Stock Retained Earnings Net Profit/Loss 18,626 $18,626 $29,285 83,081 (72,376) 8,614 Total Equity 19,319 Total Liabilities and Equity $48,604
Transcribed Image Text:TABLE 4-8 Financial Statements for Sam's Sandwich Delivery Profit Loss (Income Statement) for Six Months Ending June 30, 2013 Revenues Retail Sales Wholesale Sales $68,283 104.417 Total Revenues Cost of Sales Gross Profit $172,700 52,067 $120,633 Total Operating Expenses Operating Profit Other Income/Expenses Interest Income Interest Expense Depreciation-Store Equipment Total Other Income/Expenses Net Profit 111,117 $ 9,516 41 (651) (292) (902) $ 8,614 Balance Sheet as of 06-30-2013 Assets Current Assets $ Change Fund Cash in Bank-Checking Cash in Bank-Savings Accounts Receivable 569 8,612 9,622 6,843 2,607 Inventories Total Current Assets $28,253 Fixed Assets Furniture and Fixtures Less: Accum Depreciation Equipment Less: Accum Depreciation Transportation Equipment Less: Accum Depreciation Total Fixed Assets Total Assets 4,296 4,110 68,293 67,725 31,168 11,571 186 568 19,597 $20,351 $48,604 Current Liabilities Accounts Payable Trade Accrued Payroll Taxes Accrued Sales Taxes 6,208 3,464 987 Total Current Liabilities $10,659 Long-Term Liabilities Auto Loans Payable Total Long-Term Liabilities Total Liabilities Stockholder's Equity Common Stock Retained Earnings Net Profit/Loss 18,626 $18,626 $29,285 83,081 (72,376) 8,614 Total Equity 19,319 Total Liabilities and Equity $48,604
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