Calculate the following ratios for the company

Assignment Help Accounting Basics
Reference no: EM131772622

Below are the balance sheet and income statement for Happy Hamburger Company.

Happy Hamburger Company
Balance Sheet as of December 31, 20XX

Assets

 

 

Liabilities and Shareholder Equity

 

Cash

           78,000

 

Accounts payable

         136,000

Accounts Receivable

         336,500

 

Current portion of debt

           82,500

Inventories

         225,000

 

Other current liabilities

         114,000

Total current assets

         639,500

 

Total current liabilities

         332,500

Net fixed assets

         310,000

 

Long-term debt

         252,000

Total assets

         949,500

 

Total Liabilities

         584,500

 

 

 

Common equity

         365,000

 

 

 

Total Liabilities & Equity

         949,500

 

Happy Hamburger Company
Income Statement for the year ending December 31, 20XX
Sales           1,704,560
Cost of goods sold           1,489,000
Selling, general and administrative expenses              152,000
   Earnings before interest and taxes (EBIT)                63,560
Interest expense                26,200
   Earnings before taxes (EBT)                37,360
Federal and state income taxes (40%)                14,944
Net Income                22,416

Required:

  1. Calculate the following ratios for the company.
  2. Explain whether the company is doing better or worse than the industry average for each ratio.

 

Happy
Hamburger

Industry
Average

Current ratio            1.7
Days sales outstanding (based on 365 day year)            36 days
Inventory turnover            7.3
Fixed asset turnover            12.1
Total asset turnover            3.00
Return on sales            3.20%
Return on assets            3.60%
Return on equity            9.00%
Debt ratio            71%

Use an Excel spreadsheet for your answers.

Reference no: EM131772622

Questions Cloud

Compute the machines internal rate of return : Compute the machine's internal rate of return. Would you recommend purchase of the machine
What proportion of days in typical years have rain : You are interested in knowing what proportion of days in typical years have rain or snow in the area where you live. For the months of January and February.
Value of your retirement plan after : Given a 6 percent interest rate, what is the value of your retirement plan after the 40 years?
Specify the population and the measurement of interest : Explain whether you think the Rule for Sample Means applies to each of the following situations. If it does apply, specify the population of interest.
Calculate the following ratios for the company : Calculate the following ratios for the company, Explain whether the company is doing better or worse than the industry average for each ratio
Demographics and technology impact economic growth : Please explain how demographics and technology impact economic growth. Why does this matter to the FED? Should these factors impact FED policies?
Prepare a journal - explorer travel and tour : Prepare a JOURNAL - Explorer Travel And Tour - Prepare journal according to presentation - Oman is a booming market for Tourism as government
What is the total amount of us dollars received : The exercise price is US$0.55/NZ$. If the option is exercised, what is the total amount of US dollars received (after accounting for the premium paid) by firm
What price should this bond trade? today : The yield on the bond issue is 6.35?%. At what price should this bond trade? today, assuming a face value of ?$1,000??

Reviews

Write a Review

Accounting Basics Questions & Answers

  What criteria should the federal government control

Should the federal government intervene and set criteria that monitor all state funded pension plans? What criteria should the federal government control?

  What is the present worth of 50000 in month 1 51000 in

what is the present worth of 500.00 in month 1 510.00 in month 2 and amounts increasing by 10 per month through month

  Identify of the companys expenses

Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed - Using the high-low method, separate each mixed expense into variable and fixed elements.

  Addition plus publishes math textbooks for middle

AdditionPlus publishes math textbooks for middle schools in western Pennsylvania. AdditionPlus sold 1 million textbooks last year for $14 million in revenue. Each textbook uses $1 in paper, ink, and binding, and is assigned $1 in untraceable mater..

  Prepare turners 2010 journal entries using the percentage

At December 31, 2010, the estimated future costs to complete the project total $3,300,000. Prepare Turner's 2010 journal entries using the percentage-of-completion method.

  Price-usage and total variance

If I were to make muffins and the blueberries for the muffins cost 2.05 per bag and I use 11 blueberries per muffin but then found out that people liked 15 berries per muffin and I found a store that sold 400 berries per bag at 1.89 per bag. How d..

  Forgive the interest accrued for the year just ended

Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at

  How the journal entries affect the balance sheet

Explain how the journal entries affect the balance sheet and income statement of ParentCo (use examples to support your responses)

  Journal entries for preferred and common stocks

Common and preferred stock? issuances and dividends. Flameco Corp. was incorporated on January 1, 2003, and issued the following stock, for cash:

  Problem regarding the budgeting and variance analysis

Healthcare Financial Management and Economics-Budgeting and Variance Analysis

  Prepare a statement of revenues expenditures and changes in

capital project transactions. in 2011 falts city began work to improve cer-tain streets to be financed by a bond issue

  Find the amount to credit for a raw materials transaction

How do you find the amount to credit for a raw materials transaction

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd