Assume you are an analyst evaluating mesco company the

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Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, Year 5):

Retained earnings, December 31, Year 4

$98,000

Days" sales in receivables

18 days

Gross profit margin ratio

25%

Shareholders" equity to total debt

4 to 1

Acid-test ratio

2.5 to 1

Sales (all on credit)

$920,000

Noncurrent assets

$280,000

Common stock: $15 par value; 10,000 shares issued

and outstanding; issued at $21 per share


Days" sales in inventory.

45 days







Required:

Using these data, construct the December 31, Year 5, balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for Year 5) are $180,000. The tax rate is 40%. Assume a 360-day year in ratio computations. No cash dividends are paid in either Year 4 or Year 5. Current assets consist of cash, accounts receivable, and inventories.

Reference no: EM13573499

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