BALANCE SHEET ANALYSIS Complete the balance sheet and sales information using th

Question

BALANCE SHEET ANALYSIS

Complete the balance sheet and sales information using the following financial data:

Total assets turnover: 1.1x
Days sales outstanding: 30.5 days^a
Inventory turnover ratio: 4x
Fixed assets turnover: 2.5x
Current ratio: 2.4x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.

Balance Sheet Cash $    Current liabilities $    Accounts receivable    Long-term debt 41,250 Inventories    Common stock    Fixed assets    Retained earnings 96,250 Total assets $275,000 Total liabilities and equity $    Sales $    Cost of goods sold $   

Explanation / Answer

Total asset turnover = sales/ total asset = 1.1

sales = 1.1 * $275000 = $302500

Fised asset turnover = sales/ fixed asset = 2.5

Fixed asset = $302500/2.5 = $121000

Total liabilities and equity = total assets = $275000

Gross profit margin = (sales - COGS)/sales = (302500 - COGS)/302500 = .25

COGS = $226875

Current Asset = total asset - fixed asset = 275000 - 121000 = 154000

Current ratio = current asset/current liabilities = 2.4

Current liabilities = $154000/2.4 = $64166.67

Common stock = total liabilites and equity - retained earnings - long term debt - current liabilties

= $73333.33

inventory turnover ratio = COGS/inventories = 4

Inventories = 226875/4 = $56718.75

Days sales outstanding = 365 * account receivables/sales = 30.5

Account receivables = 30.5 * 302500/365 = $25277.40

Cash = total asset - fixed asset - account receivables - inventories

= 275000 - 25277.4 - 56718.75 - 154000 = $39003.85

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