Reference no: EM132489873
Use the following information for Fanny Farms to answer the following Questions:
Question 1. Prepare 2009 and 2010 common-size balance sheets for Fanny Farms.
Question 2. Prepare 2009 and 2010 common-size income statements for Fanny Farms.
Question 3. Compute ROFA, ROFE and COFD for 2010.
Question 4. Calculate two liquidity ratios and one solvency ratio for Fanny Farms for 2009 and 2010. Has liquidity increased or decreased from 2009 to 2004? Has solvency increased or decreased from 2009 to 2010?
Question 5. Calculate the term debt and capital lease coverage ratio and the capital replacement and term debt repayment margin for 2010.
Question 6. Calculate the four operational efficiency ratios for Fanny Farms for 2010
Balance Sheet
2009 2010
ASSETS
Current Assets
Cash and equivalents $ 1,000 $ 1,200
Grain and livestock inventory 60,000 40,000
Other current farm assets 1,000 1,000
Total current assets 62,000 42,200
Noncurrent Assets
Machinery and equipment 100,000 110,000
Buildings 20,000 18,000
Land 300,000 290,000
Other noncurrent farm assets 15,000 15,000
Total noncurrent assets 435,000 433,000
Total Farm Assets $ 497,000 $ 475,200
LIABILITIES
Current Liabilities
Notes payable $ 15,500 $ 10,550
Accounts payable 2,325 1,582
Current portion of term debt 12,000 14,000
Other current farm liabilities 15,000 20,000
Total current liabilities 44,825 46,132
Noncurrent Liabilities
Deferred portion of term debt 150,000 136,000
Total noncurrent liabilities
Total Farm Liabilities 194,825 182,132
Total Net Worth 302,175 293,068
Total Liabilities and Net Worth $ 497,000 $ 475,200
INCOME STATEMENT
Value of farm production $ 139,160 $ 160,034
Nondepreciation operating expenses 76,538 79,321
Depreciation 15,000 16,000
Interest expense 14,571 14,570
Net farm income from operations 33,051 50,143
OTHER INFORMATION
Family living withdrawals $ 25,000 $ 25,700
Nonfarm income 0 0
Income tax expense 9,091 6,700
Other income from farm assets 0 0
Principal payments on current
portions of term debt and capital leases 12,000 14,000
Interest payments on term debt and capital leases 13,500 12,240