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Business Finance INTERMEDIATE FINAN...-MINDTAP(1 TERM)

The revenue, costs, profits, and losses incurred by the business organizations over a specific time period are shown while preparing the income statement. An income statement offers useful information about the entities operations, management effectiveness, and underperforming industries, etc. To Prepare: Partial income statement and the Balance sheet Partial Income Statement Sales 600,000 Cost of goods sold 450,000 Balance Sheet Cash 28,000 Accounts payable 110,000 Accounts receivable 60,000 Long-Term debt 50,000 Inventories 120,000 Common stock 140,000 Fixed assets 192,000 Retained earnings 100,000 Total assets 400,000 Total liabilities and equity 400,000 Total assets =$400,000 Total liabilities to assets ratio =40% So,Total liabilities =40%× $400,000 =$160,000 Total assets= Common stock+Retained earnings+ Total liabilities $400,000=Common stock+$100,000+$160,000 Commonstock=$400,000-$100,000-$160,000 =$140,000 Total liabilities =Long term debt+Short term debt $160,000 =$50,000+Short term debt Short term debt =$160,000-50,000 =$110,000 So,Accounts payable (as this is the only short term liability) = $110,000 Total assets turnover ratio =1 .5times So,Turnover =1 .5×Totalassets =1 .5×$400,000 =$600,000 Gross profit margin on sales=25% Grossprofit=Turnover×Gross profit margin on sales =$600,000×25% =$150,000 Cost of goods = Sales - Gross profit =$600,000-$150,000 =$450,000 Days sales outstanding =36 .5days Days sales outstanding = Accounts receivable Total credit sales ×number of days 36 .5= Accountsreceivable $600,000 ×365 Accountsreceivable= 36 .5×$600,000 365 =$60,000 Quick ratio =0 .80 Quick ratio = Quick assets Current liabilities Current liabilities = Accounts payable So,Quick assets=0 .80×$110,000 =$88,000 Quick assets = Cash +Accounts receivable $88,000=Cash+$60,000 Cash=$88,000-$60,000 =$28,000 Inventory turn over ratio = 3 .75 3 .75= cost of goods sold Inventory Inventory= $450,000 3 .75 =$120,000 Fixed assets = Total assets - Accounts receivables - inventory - Cash =$400,000-$60,000-$120,000-$28,000 =$192,000

The revenue, costs, profits, and losses incurred by the business organizations over a specific time period are shown while preparing the income statement. An income statement offers useful information about the entities operations, management effectiveness, and underperforming industries, etc. To Prepare: Partial income statement and the Balance sheet Partial Income Statement Sales 600,000 Cost of goods sold 450,000 Balance Sheet Cash 28,000 Accounts payable 110,000 Accounts receivable 60,000 Long-Term debt 50,000 Inventories 120,000 Common stock 140,000 Fixed assets 192,000 Retained earnings 100,000 Total assets 400,000 Total liabilities and equity 400,000 Total assets =$400,000 Total liabilities to assets ratio =40% So,Total liabilities =40%× $400,000 =$160,000 Total assets= Common stock+Retained earnings+ Total liabilities $400,000=Common stock+$100,000+$160,000 Commonstock=$400,000-$100,000-$160,000 =$140,000 Total liabilities =Long term debt+Short term debt $160,000 =$50,000+Short term debt Short term debt =$160,000-50,000 =$110,000 So,Accounts payable (as this is the only short term liability) = $110,000 Total assets turnover ratio =1 .5times So,Turnover =1 .5×Totalassets =1 .5×$400,000 =$600,000 Gross profit margin on sales=25% Grossprofit=Turnover×Gross profit margin on sales =$600,000×25% =$150,000 Cost of goods = Sales - Gross profit =$600,000-$150,000 =$450,000 Days sales outstanding =36 .5days Days sales outstanding = Accounts receivable Total credit sales ×number of days 36 .5= Accountsreceivable $600,000 ×365 Accountsreceivable= 36 .5×$600,000 365 =$60,000 Quick ratio =0 .80 Quick ratio = Quick assets Current liabilities Current liabilities = Accounts payable So,Quick assets=0 .80×$110,000 =$88,000 Quick assets = Cash +Accounts receivable $88,000=Cash+$60,000 Cash=$88,000-$60,000 =$28,000 Inventory turn over ratio = 3 .75 3 .75= cost of goods sold Inventory Inventory= $450,000 3 .75 =$120,000 Fixed assets = Total assets - Accounts receivables - inventory - Cash =$400,000-$60,000-$120,000-$28,000 =$192,000

INTERMEDIATE FINAN...-MINDTAP(1 TERM)

INTERMEDIATE FINAN...-MINDTAP(1 TERM)

14th Edition

ISBN: 9780357516720

Author: Brigham

Publisher: CENGAGE L

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INTERMEDIATE FINAN...-MINDTAP(1 TERM)

Ch. 7 - Financial ratio analysis is conducted by managers,...Ch. 7 - Prob. 3Q Ch. 7 - Profit margins and turnover ratios vary from one...Ch. 7 - How might (a) seasonal factors and (b) different...Ch. 7 - Why is it sometimes misleading to compare a...Ch. 7 - Greene Sisters has a DSO of 20 days. The companys...Ch. 7 - Vigo Vacations has $200 million in total assets,...Ch. 7 - Winston Watch’s stock price is $75 per share....Ch. 7 - Reno Revolvere has an EPS of $1.50, a cash flow...Ch. 7 - Needham Pharmaceuticals has a profit margin of 3%...

Ch. 7 - Prob. 6P Ch. 7 - Ace Industries has current assets equal to 3...Ch. 7 - Prob. 10P Ch. 7 - Prob. 11P Ch. 7 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 7 - Data for Lozano Chip Company and its industry...Ch. 7 - Why are ratios useful? What three groups use ratio...Ch. 7 - Prob. 9MC Ch. 7 - What are some qualitative factors that analysts...

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