Complete the following exercise. Fill in the Excel spreadsheet provided via the

Question

Complete the following exercise. Fill in the Excel spreadsheet provided via the link at the bottom of the page to provide your answers to parts a and b. Then paste the Excel data into a Word document on which you can also write the answer to part c.

Administrative Expenses

$ 70,000

Finished Goods Inventory January 1, 20X3

$120,000

Cost of Goods Manufactured during the year

$200,000

Finished Goods Inventory December 31, 20X3

$ 60,000

Selling Expenses

$ 40,000

Sales

$680,000

Required:

Using the information for Superior Manufacturing Company, prepare the income statement for the year ended December 31, 20X3. (Assume a 30% income tax.)

Provide at least three performance ratios regarding Superior Manufacturing Company, and comment on the company's performance.

Create a report between 200 and 300 words in length for leadership. The topic is the state of this company. Where do you see a problem regarding the company? Make some suggestions if there are areas you feel need to be further investigated.

Administrative Expenses

$ 70,000

Finished Goods Inventory January 1, 20X3

$120,000

Cost of Goods Manufactured during the year

$200,000

Finished Goods Inventory December 31, 20X3

$ 60,000

Selling Expenses

$ 40,000

Sales

$680,000

Explanation / Answer

Comment:

Comment: The gross margin shows the margin or profit earned from the sales revenue after meeting cost of goods sold. The firm has reported a gross margin of 55.58% in the current year.

The net margin shows the margin or profit earned from the revenue after meeting all the operating expenses. The firm has reported a higher net margin of 45.59% in the current year. Although strong conclusion cannot be made without industry data the company shows marked performance in earnings. Howeevr we need to company review its other competitors performance in the industry.

Inventory turnover shows the selling position of the firm.

A high turnover means higher sales and lower turnover inventory means more goods in the stores. In addition to this it indicates more storage costs are incurred for maintaining the inventory.Here the company has reported an inventory turnover ratio of 2.89

Income statement Sales 680000 Less:COGS Cost of Goods Manufactured during the year 200000 Add:opening inventory 120000 Less:closing inventory -60000 260000 Add:selling expenses 40000 Gross profit 380000 Less:Administrative Expenses 70000 net income 310000 Ratio gross margin 55.88% net margin 45.59% inventory turnover 2.89

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