Homework Help is Here – Start Your Trial Now!
Business
Accounting
Income Statements Fashion Forward Dream Designs Balance Sheets Fashion Forward Fashion Forward Dream Designs Dream Designs 31/12/2018 31/12/2018 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Revenue Current Assets Credit Sales 2,000,000 4,320,000 Cash and Cash Equivalents 950,000 980,000 1,710,000 1,705,000 Non-Credit Sales 500,000 1,080,000 Accounts Receivable 200,000 150,000 250,000 275,000 Miscelanious Receivables 35,000 50,000 120,500 100,000 Total Revenue 2,500,000 5,400,000 Inventory 112,000 105,000 200,000 215,000 Cost of Sales 1,400,000 3,250,000 Total Current Assets 1,297,000 1,285,000 Gross Profit 1,100,000 2,150,000 Property, Plant and Equipment 635,000 700,000 Goodwill 750,000 750,000 2,280,500 850,000 1,150,000 2,295,000 900,000 1,150,000 Operating Expenses Other Long-Term Assets 65,000 Research and Development 50,000 200,000 Total Assets 2,747,000 70,000 2,805,000 100,750 4,381,250 105,000 4,450,000 Selling, General, and Administrative 750,000 1,600,000 Total Operating Expenses 800,000 1,800,000 Current Liabilities Accounts Payable Earnings Before Interest and Taxes 300,000 350,000 Short-Term Debt 545,000 25,000 535,000 845,750 875,000 50,000 60,000 Other Current Liabilities 600,000 510,000 730,000 740,000 Interest Expense (18,000) (50,000) Total Current Liabilities 1,170,000 1,045,000 1,625,750 1,675,000 Income Before Tax 282,000 300,000 Long-Term Debt 75,000 120,500 130,000 Income Tax Expense (145,500) (87,500) Other Long-Term Liabilities 100,000 Net Income 136,500 212,500 Total Liabilities 1,345,000 75,000 1,120,000 155,000 1,901,250 165,000 1,970,000 Stockholders Equity Common Stock 500,000 775,000 749,500 942,750 Preferred Stock 150,000 294,500 390,000 409,250 Retained Earnings 752,000 615,500 1,340,500 1,128,000 Total Stockholders Equity 1,402,000 1,685,000 2,480,000 2,480,000 Total Liabilities and Stockholders Equity 2,747,000 2,805,000 4,381,250 4,450,000

Income Statements Fashion Forward Dream Designs Balance Sheets Fashion Forward Fashion Forward Dream Designs Dream Designs 31/12/2018 31/12/2018 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Revenue Current Assets Credit Sales 2,000,000 4,320,000 Cash and Cash Equivalents 950,000 980,000 1,710,000 1,705,000 Non-Credit Sales 500,000 1,080,000 Accounts Receivable 200,000 150,000 250,000 275,000 Miscelanious Receivables 35,000 50,000 120,500 100,000 Total Revenue 2,500,000 5,400,000 Inventory 112,000 105,000 200,000 215,000 Cost of Sales 1,400,000 3,250,000 Total Current Assets 1,297,000 1,285,000 Gross Profit 1,100,000 2,150,000 Property, Plant and Equipment 635,000 700,000 Goodwill 750,000 750,000 2,280,500 850,000 1,150,000 2,295,000 900,000 1,150,000 Operating Expenses Other Long-Term Assets 65,000 Research and Development 50,000 200,000 Total Assets 2,747,000 70,000 2,805,000 100,750 4,381,250 105,000 4,450,000 Selling, General, and Administrative 750,000 1,600,000 Total Operating Expenses 800,000 1,800,000 Current Liabilities Accounts Payable Earnings Before Interest and Taxes 300,000 350,000 Short-Term Debt 545,000 25,000 535,000 845,750 875,000 50,000 60,000 Other Current Liabilities 600,000 510,000 730,000 740,000 Interest Expense (18,000) (50,000) Total Current Liabilities 1,170,000 1,045,000 1,625,750 1,675,000 Income Before Tax 282,000 300,000 Long-Term Debt 75,000 120,500 130,000 Income Tax Expense (145,500) (87,500) Other Long-Term Liabilities 100,000 Net Income 136,500 212,500 Total Liabilities 1,345,000 75,000 1,120,000 155,000 1,901,250 165,000 1,970,000 Stockholders Equity Common Stock 500,000 775,000 749,500 942,750 Preferred Stock 150,000 294,500 390,000 409,250 Retained Earnings 752,000 615,500 1,340,500 1,128,000 Total Stockholders Equity 1,402,000 1,685,000 2,480,000 2,480,000 Total Liabilities and Stockholders Equity 2,747,000 2,805,000 4,381,250 4,450,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
You work in the mergers and acquisitions department of a large conglomerate who is looking to invest in a retail business. Two companies, Fashion Forward and Dream Designs, are the final two options being considered. You have the most recent available income statements and two years of balance sheets for each company.
 
Compute the following ratios for each company:
 
Profit Margin Ratio
Return on Assets
Current Ratio
Quick Ratio
AR Turnover Ratio
Average Collection Period
Inventory Turnover Ratio
Average Sales Period
Debt to Equity Ratio
For this assignment:
Compute all required amounts and explain how the computations were performed
Evaluate the results for each company and explain what each ratio means
Compare and contrast the companies.
Based on your analysis:
recommend which company the organization should pursue
Thoroughly support your conclusion, including what other factors should be considered
Be specific.
Superior papers will:
 
Perform all calculations correctly.
Articulate how the calculations were performed.
Evaluate the ratios computed and explain the meaning of the ratios.
Compare the companies.
Recommend which company to pursue, supported by well-thought-out rationale and considering any other factors that could impact the recommendation.
Income Statements Fashion Forward Dream Designs Balance Sheets Fashion Forward Fashion Forward Dream Designs Dream Designs 31/12/2018 31/12/2018 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Revenue Current Assets Credit Sales 2,000,000 4,320,000 Cash and Cash Equivalents 950,000 980,000 1,710,000 1,705,000 Non-Credit Sales 500,000 1,080,000 Accounts Receivable 200,000 150,000 250,000 275,000 Miscelanious Receivables 35,000 50,000 120,500 100,000 Total Revenue 2,500,000 5,400,000 Inventory 112,000 105,000 200,000 215,000 Cost of Sales 1,400,000 3,250,000 Total Current Assets 1,297,000 1,285,000 Gross Profit 1,100,000 2,150,000 Property, Plant and Equipment 635,000 700,000 Goodwill 750,000 750,000 2,280,500 850,000 1,150,000 2,295,000 900,000 1,150,000 Operating Expenses Other Long-Term Assets 65,000 Research and Development 50,000 200,000 Total Assets 2,747,000 70,000 2,805,000 100,750 4,381,250 105,000 4,450,000 Selling, General, and Administrative 750,000 1,600,000 Total Operating Expenses 800,000 1,800,000 Current Liabilities Accounts Payable Earnings Before Interest and Taxes 300,000 350,000 Short-Term Debt 545,000 25,000 535,000 845,750 875,000 50,000 60,000 Other Current Liabilities 600,000 510,000 730,000 740,000 Interest Expense (18,000) (50,000) Total Current Liabilities 1,170,000 1,045,000 1,625,750 1,675,000 Income Before Tax 282,000 300,000 Long-Term Debt 75,000 120,500 130,000 Income Tax Expense (145,500) (87,500) Other Long-Term Liabilities 100,000 Net Income 136,500 212,500 Total Liabilities 1,345,000 75,000 1,120,000 155,000 1,901,250 165,000 1,970,000 Stockholders Equity Common Stock 500,000 775,000 749,500 942,750 Preferred Stock 150,000 294,500 390,000 409,250 Retained Earnings 752,000 615,500 1,340,500 1,128,000 Total Stockholders Equity 1,402,000 1,685,000 2,480,000 2,480,000 Total Liabilities and Stockholders Equity 2,747,000 2,805,000 4,381,250 4,450,000
Transcribed Image Text:Income Statements Fashion Forward Dream Designs Balance Sheets Fashion Forward Fashion Forward Dream Designs Dream Designs 31/12/2018 31/12/2018 31/12/2018 31/12/2017 31/12/2018 31/12/2017 Revenue Current Assets Credit Sales 2,000,000 4,320,000 Cash and Cash Equivalents 950,000 980,000 1,710,000 1,705,000 Non-Credit Sales 500,000 1,080,000 Accounts Receivable 200,000 150,000 250,000 275,000 Miscelanious Receivables 35,000 50,000 120,500 100,000 Total Revenue 2,500,000 5,400,000 Inventory 112,000 105,000 200,000 215,000 Cost of Sales 1,400,000 3,250,000 Total Current Assets 1,297,000 1,285,000 Gross Profit 1,100,000 2,150,000 Property, Plant and Equipment 635,000 700,000 Goodwill 750,000 750,000 2,280,500 850,000 1,150,000 2,295,000 900,000 1,150,000 Operating Expenses Other Long-Term Assets 65,000 Research and Development 50,000 200,000 Total Assets 2,747,000 70,000 2,805,000 100,750 4,381,250 105,000 4,450,000 Selling, General, and Administrative 750,000 1,600,000 Total Operating Expenses 800,000 1,800,000 Current Liabilities Accounts Payable Earnings Before Interest and Taxes 300,000 350,000 Short-Term Debt 545,000 25,000 535,000 845,750 875,000 50,000 60,000 Other Current Liabilities 600,000 510,000 730,000 740,000 Interest Expense (18,000) (50,000) Total Current Liabilities 1,170,000 1,045,000 1,625,750 1,675,000 Income Before Tax 282,000 300,000 Long-Term Debt 75,000 120,500 130,000 Income Tax Expense (145,500) (87,500) Other Long-Term Liabilities 100,000 Net Income 136,500 212,500 Total Liabilities 1,345,000 75,000 1,120,000 155,000 1,901,250 165,000 1,970,000 Stockholders Equity Common Stock 500,000 775,000 749,500 942,750 Preferred Stock 150,000 294,500 390,000 409,250 Retained Earnings 752,000 615,500 1,340,500 1,128,000 Total Stockholders Equity 1,402,000 1,685,000 2,480,000 2,480,000 Total Liabilities and Stockholders Equity 2,747,000 2,805,000 4,381,250 4,450,000
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

SEE SOLUTION
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS