1) Company XYZ Balance Sheet Assets Liabilities Cash $10,000 Accounts Payable $1
ID: 2699126 • Letter: 1
Question
1) Company XYZ
Balance Sheet
Assets Liabilities
Cash $10,000 Accounts Payable $17,000
Marketable Securities 20,000 Notes Payable 15,000
Accounts Receivable 35,000 Accrued Wages 10,000
Inventory 30,000 Bank Loan 45,000
Net Plant & Equipment $105,000 Total Liabilities $87,000
Owners Equity
Common Stock $75,000
Retained Earnings 38,000
Total Owners Equity $113,000
Total Assets $200,000 Total Liabilities & Owners Equity $200,000
Sales during the year were $500,000.
Net Income for the year was $40,000.
Market Price per share is currently $30.00.
Interest expense for the year was $5,000.
Earnings before taxes were $60,000.
Shares of Common Stock 10,000
Based on the above information calculate and interpret the following ratios:
1)Current Ratio
2)Quick Ratio
3)Days Sales Outstanding
4)Total Asset Turnover
5)Total Debt Ratio
6)Profit Margin
7)ROA
8)ROE
9)Fixed Asset Turnover
10) Price Earnings Ratio
11) Market to Book Value
12) Based on the ratio analysis you just conducted how good of financial shape do think this firm is in? Why?
13) When will a firms ROA and ROE be equal to one another?
Explanation / Answer
Current Assets Cash 10000 Mkt. Sec. 17000 Acc. Recv. 35000 Inventory 30000 92000 Current Liabilitites Acc. Payb 17000 Notes payb. 15000 Acc. Wages 10000 Bank loan 45000 87000 Current Ratio 1.06 Quick Ratio 0.71 Please cinsider the time devoted by rating this as lifesaver. Thank u in advance. God bless u :)
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