Solution-Calculate the following ratios for the company

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:

Calculate the following ratios for the company.
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

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Calculate the following ratios for the company

Reference no: EM131772622

Reference no: EM131772622

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