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: 1.2x Days sales outstanding: 38 daysa Inventory turnover ratio: 7x Fixed assets turnover: 2.5x Current ratio: 2.4x Gross profit margin on sales: (Sales-Cost of goods sold)/Sales-15% Calculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent. Balance Sheet Cash Current liabilities 56104.7 48750 Accounts receivable Long-term debt 45,000 28109.6 Inventories 32785.71e3 Common stock 63750 Fixed assets 67,500 Retained earning:s Total liabilities and equity $ Cost of goods sold 108000 Total assets $225,000 225000 Sales 270000 229500

Explanation / Answer

Inventory Turnover ratio = Sales / Inventory

or, 7 = $270000 / Inventory

or, Inventory = $270000 / 7 = $38571.43

Cash = Total assets - Fixed assets - inventories - accounts receivables = $225000 - $108000 - $38571.43 - $28109.60 = $50,318.97

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