The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses.Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020 Assets Cash 72,000 Accounts receivable 439,000 Inventories 894,000 Total current assets 1,405,000 Fixed assets 431,000 Total assets 1,836,000 Liabilities and Equity Accounts payable 332000 Notes payable 100,000 Accruals 170,000 Total current liabilities 602,000 Long-term debt 404,290 Common stock 575,000 Retained earnings 254,710 Total liabilities and equity 1,836,000 Jimenez Corporation: Forecasted Income Statement for 2020 Sales 4,290,000 Cost of goods sold 3,580,000 Selling, general, and admin expenses 525,456 Earnings before taxes (EBT) 184,544 Interest expense 40,000 Earnings before taxes (EBT) 144,544 Taxes (25%) 36,136 Net Income 108,408 Jimenez Corporation: Per Share Data for 2020 EPS 4.71 Cash dividends per share 0.95 P/E ratio 5.0 Market price (average) 23.57 Number of shares outstanding 23,000 RATIO JIMENEZ INDUSTRY AVGa Quick Ratio 1.0 Current Ratio 2.7 Inventory Turnoverb 7.0 Days sales outstandingc 32.0 days Fixed assets turnoverb 13.0 Total assets turnoverb 2.6 Return on assets 9.1% Return on equity 18.2% Profit margin on sales 3.5% Debt-to-assets ratio 21.0% Liabilities-to-assets ratio 50.0% P/E ratio 6.0 Market/Book ratio 3.5 Notes: a Industry average ratios have been stable for the past 4 years b Based on year-end balance sheet figures c Calculation is based on a 365-day year
The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses.Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020 Assets Cash 72,000 Accounts receivable 439,000 Inventories 894,000 Total current assets 1,405,000 Fixed assets 431,000 Total assets 1,836,000 Liabilities and Equity Accounts payable 332000 Notes payable 100,000 Accruals 170,000 Total current liabilities 602,000 Long-term debt 404,290 Common stock 575,000 Retained earnings 254,710 Total liabilities and equity 1,836,000 Jimenez Corporation: Forecasted Income Statement for 2020 Sales 4,290,000 Cost of goods sold 3,580,000 Selling, general, and admin expenses 525,456 Earnings before taxes (EBT) 184,544 Interest expense 40,000 Earnings before taxes (EBT) 144,544 Taxes (25%) 36,136 Net Income 108,408 Jimenez Corporation: Per Share Data for 2020 EPS 4.71 Cash dividends per share 0.95 P/E ratio 5.0 Market price (average) 23.57 Number of shares outstanding 23,000 RATIO JIMENEZ INDUSTRY AVGa Quick Ratio 1.0 Current Ratio 2.7 Inventory Turnoverb 7.0 Days sales outstandingc 32.0 days Fixed assets turnoverb 13.0 Total assets turnoverb 2.6 Return on assets 9.1% Return on equity 18.2% Profit margin on sales 3.5% Debt-to-assets ratio 21.0% Liabilities-to-assets ratio 50.0% P/E ratio 6.0 Market/Book ratio 3.5 Notes: a Industry average ratios have been stable for the past 4 years b Based on year-end balance sheet figures c Calculation is based on a 365-day year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Jimenez Corporation’s
Jimenez Corporation:
Forecasted
Assets | |
Cash | 72,000 |
439,000 | |
Inventories | 894,000 |
Total current assets | 1,405,000 |
Fixed assets | 431,000 |
Total assets | 1,836,000 |
Liabilities and Equity | |
Accounts payable | 332000 |
Notes payable | 100,000 |
Accruals | 170,000 |
Total current liabilities | 602,000 |
Long-term debt | 404,290 |
Common stock | 575,000 |
254,710 | |
Total liabilities and equity | 1,836,000 |
Jimenez Corporation:
Sales | 4,290,000 |
Cost of goods sold | 3,580,000 |
Selling, general, and admin expenses | 525,456 |
Earnings before taxes (EBT) | 184,544 |
Interest expense | 40,000 |
Earnings before taxes (EBT) | 144,544 |
Taxes (25%) | 36,136 |
Net Income | 108,408 |
Jimenez Corporation: Per Share Data for 2020
EPS | 4.71 |
Cash dividends per share | 0.95 |
P/E ratio | 5.0 |
Market price (average) | 23.57 |
Number of shares outstanding | 23,000 |
RATIO | JIMENEZ | INDUSTRY AVGa |
Quick Ratio | 1.0 | |
2.7 | ||
Inventory Turnoverb | 7.0 | |
Days sales outstandingc | 32.0 days | |
Fixed assets turnoverb | 13.0 | |
Total assets turnoverb | 2.6 | |
Return on assets | 9.1% | |
Return on equity | 18.2% | |
Profit margin on sales | 3.5% | |
Debt-to-assets ratio | 21.0% | |
Liabilities-to-assets ratio | 50.0% | |
P/E ratio | 6.0 | |
Market/Book ratio | 3.5 |
Notes:
a Industry average ratios have been stable for the past 4 years
b Based on year-end balance sheet figures
c Calculation is based on a 365-day year
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