Tribke Enterprises collected the following data from its financial reports for 2
ID: 2775489 • Letter: T
Question
Tribke Enterprises collected the following data from its financial reports for 2012:
Stock Price $18.37
Inventory balance $300,000
Expenses (excluding COGS) $1,120,000
Shares outstanding 290,000
Average issue price of shares $5.00
Gross Margin % 40%
Interest ratio 8%
TIE ratio 8
inventory turnover 12 X
curent ratio 1.5
quick ratio .75
fixed asset turnover 1.5
Set up an income statement that includes revenue, COGS, GM, EBIT, EBT and EAT. Set up a balance sheet that includes current assets, fixed assets, total assets, current liabilities, long-term debt, equity (paid in capital) and retained earnigngs, total equity, and total liabilities and equity.
Explanation / Answer
Cost of goods sold = Inventory x inventory turnover
= 300,000 x 12
= 3,600,000
Sales = COGS/ ( 1- gross margin %)
= 3,600,000/ (1-0.40)
= 6,000,000
Total fixed assets = Sales / fixed assets turnover
= 6,000,000/ 1.5
=4,000,000
Interest = EBIT/ Time interest earned
= 1280000/8
=160,000
Current assets = current liabilities x current ratio
= 1.5 Current liabilities
Quick ratio = (current assets – inventory) / current liabilities
0.75 = 1.5 – 300,000/Current liabilities
Current liabilities = 300,000/0.50
= 600,000
Current assets = 600,000x1.5
= 900,000
Long term debt = interest / interest ratio
=160,000/ 0.08
=2,000,000
Income Statement
Sales
6000000
Cogs
-3600000
Gross profit
2400000
expenses
-1120000
EBIT
1280000
Inteerst
-160000
EBT
1120000
taxes
-270000
net income
850000
Balance Sheet
Current assets
900,000
Current liabilites
600000
fied assets
4000000
Long term debt
2000000
Equity
Common stock( 290,000 x5)
1450000
retained earnings
850000
Total Equity
2300000
Total assets
4,900,000
Total liabilities and equity
4900000
Income Statement
Sales
6000000
Cogs
-3600000
Gross profit
2400000
expenses
-1120000
EBIT
1280000
Inteerst
-160000
EBT
1120000
taxes
-270000
net income
850000
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