Financial ratios and statements

Assignment Help Financial Management

Reference no: EM131882143

1. Financial Statements: Develop an Income Statement for 20XX, Cash Flow Statement for 20XX, and Balance Sheet as of the end of 20XX based on the data provided below for year 20XX. All sales are collected when the sale is made and all expenses are paid when the expense is incurred. Explain the purpose of each financial statement.

Income Statement Data for 20XX:

Units produced and sold = 420

Sales ($80 per unit selling price) = $33600

Cost of goods sold ($30 per unit, all variable costs) = $12600

Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves)

Advertising fees =$2000

Bank fees = $150

Phone/internet = $1200

Shipping ($3 per unit) = $1260

Utilities = $900

Office supplies = $800

Interest expense on note payable = $350

Depreciation expense (straight line) = $800

Income tax rate = 26 %

Other Financial Data for 20XX:

Proceeds from sale of equipment = $3000. The equipment originally cost $1000 and had accumulated depreciation of $200.

Purchase of equipment = $1600 (The machine is purchased on the last day of 20XX so no depreciation expense is recorded.)

Repayment of note payable = $5000

Consider any data relevant from the income statement.

Balance Sheet Data for Beginning of 20XX:

Cash and cash equivalents = $10000

Accounts receivable = $0 (Cash is received at time of sale)

Raw materials inventory = $10500

Equipment = $5000 (This includes the $1000 cost of the equipment sold in 20XX).

Accumulated depreciation = $1,000 (This includes the accumulated depreciation of 200 for the equipment sold in 20XX.

Accounts payable = $0 (Cash is paid at the time of purchase.)

Note payable = $5000 (This is the note payable which is repaid in 20XX)

Common stock = $15000

Retained earnings = $4500

2. Financial Ratios: Calculate the following financial ratios and explain the meaning of the results.

Net Profit Margin

Quick Ratio

Debt-to-Equity Ratio

Reference no: EM131882143

Questions Cloud

Discuss the symptoms and problems of the case : Answer these questions: Brief Overview (Describe the Company and issues discussed). Key Issues (Symptoms/Problems)

What is the best combination of plans for brad and sheryl : Economically, what is the best combination of plans for Brad and Sheryl, assuming they both live to be 85 years old?

Apply communication theories to organizational communication : Communication Skills - E Portfolio - Apply communication theories to organizational communication challenges. Analyze and assess the communication dynamics

Review the case of apple inc : Answer these questions from the casestudy of Apple Inc.: Implementation Plan (Steps to follow constrained by budget and timeline/Short term and long term)

Financial ratios and statements : Financial Statements. All sales are collected when the sale is made and all expenses are paid when the expense is incurred.

Discuss the ten principles of collaborative organizations : The agile manager seeks to combine the functions of management with the contemporary theories of management to create the competitive edge.

The capm-the bond-yield-plus-risk-premium approach : Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model.

Sensitivity of ocf to changes in variable cost figure : Calculate the base-case operating cash flow and NPV. What is the sensitivity of OCF to changes in the variable cost figure?

Find all strategy profile which survive iterated elimination : In the matrix you created in (b), find all strategy profiles which survive iterated elimination of strictly dominated strategies.

User Account

All Pages