Bookmarks movie Prezi-Ideas matter.racal Poly Pomona Netflix Watch online and d

Question

Bookmarks movie Prezi-Ideas matter.racal Poly Pomona Netflix Watch online and d Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $520,000 long-term loan from Gulfport State Bank, $110,000 of which will be used to bolster the Cash account and $410,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets Cash Marketable securities Accounts receivable, net 78,000 503,000 965,000 22,000 170,000 20,000 320,000 615,000 24,000 Prepaid expenses Total current assets 1,568,000 1,503,800 1,149,000 1,350,000 Plant and equipment, net Total assets Liabilities and Stockholders Equity $3,071,800 2,499,000 Liabilities: Current liabilities Bonds payable, 12% S 810,000 S 450,000 700,000 700,000 1,510,000 750,000 Total liabilities ,150,000 Stockholders' equity Common stock, $15 par Retained earnings 750,000 811,800 599,000 ,561,800 1,349,000 $3,071,800 $2,499,000 Total stockholders' equity Total liabilities and equity Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales Cost of goods sold $5,100,000 $4,410,000 3,470,000 3,895,000 Gross margin Selling and administrative expenses 1,205,000 657,000 940,000 552,000

Explanation / Answer

1.All Figures in $

a.Working Capital = Current assets -Current liabilities

b.Current ratio =Current Assets/current labilities

c.Acid Test Ratio = (Cash+marketable instruments+accounts Receivable)/Current liabilities

d.Average collection period = 365/Accounts Receivable turnover ratio

Accounts receivable turnover ratio = net sales/avg gross receivables

e.Average sale period = 365/Accounts payable turnover ratio

Accounts payable turnover ratio = Net purchases/Avg gross payables

f.Operating cycle =accounts receivable turnover in days + inventory turnover in days

g.Total Asset turnover ratio = net sales/Avg total assets

h.Debt to equity = Total Debt / total equity

i.Times interest earned

j.Equity multiplier = Total assets/Stakeholders equity

2.

This Year Last Year Working Capital 758000 699000

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