Reference no: EM13508901

Question

Using the Income Statement and Balance Sheet below determine the following financial evaluations. Put answers using equations in the cells under "Answers" in Column C.

Answers

a Market capitalization
b Current ratio
c Quick Ratio
d Debt Ratio
e Earnings per share (EPS)
f Price Earnings Ratio (PE)
g Profit Margin
h Briefly, within the space provided below, discuss implications of the above answers.

 

Income Statement		Year x			Balance Sheet		Year x
Revenue		$15,000,000		Assets
	Returns, Credits, etc.	($5,000)			Current Assets
	Net Sales (Revenue)	$14,995,000				Cash	$80,000
Direct Costs						Accounts receivable	$60,000
	Labor	($4,000,000)				Finished Goods Inventory	$40,000
	Materials	($2,500,000)				Materials Inventory	$60,000
	Cost of Goods Sold (COGS)	($6,500,000)			Total Current Assets		$240,000
	Gross Margin	$8,495,000
Selling General and Admin.					Long term Assets
	Marketing	($1,250,000)				Buildings	$10,000,000
	Research and Development	($1,000,000)				Furniture	$3,000,000
	Administration	($750,000)				Other	$1,500,000
	Other	($500,000)			Total Fixed Assets		$14,500,000
	Depreciation	($250,000)		Total Assets			$14,740,000
	S G & A	($3,750,000)
Earnings Before Interest and Taxes (EBIT)		$4,745,000		Liabilities
	Interest Expense/Income	($162,300)			Current Liabilities
	Pre-tax Income	$4,582,700				Notes Payable	$100,000
	Income Tax @ 30%	($1,374,810)				Accounts Payable	$125,000
	Net Income	$3,207,890				Taxes Payable	$10,000
					Total Current Liabilities		$235,000
					Long Term Liabilities
						Bank Loans @ 6%	$455,000
	Current Stock Price	$28.00				Mortgage @ 4.5%	$3,000,000
	Current Outstanding Shares	600,000			Total Long Term Liabilities		$3,455,000
					Capital	Stock	$9,900,000
						Retained Earnings	$1,150,000
					Stockholders Equity		$11,050,000
				Total Liabilities and Stockholders equity			$14,740,000