FIXED ASSETS 200 000 LONG TERM LIABILITIES
CURRENT ASSETS CASH 40 000 LOAN 210 000
MARKETABLE SECUR 50 000
ACCOUNTS RECEIVABLE 35 000 CURRENT LIABILITIES
INVENTORY 20 000
PREPAID EXPENSES 5 000 WAGES PAYABLE 50 000
TOTAL CURRENT ASSETS 150 000 ACCOUNTS PAYABLE 50 000
NOTES PAYABLE 40 000
TOTAL ASSETS 350 000 TOTAL LIABILITIES 350 000
A) Calculate the current ratio for the Antoine Hotel
B) Calculate the acid test ratio for Antoine Hotel.
C) Comment on the above ratios from a lender and shareholder perspective
D) Calculate the Asset turnover ratio and Fixed Asset turnover ratio and comment on reason for improvement in Fixed Asset Turnover ratio over Asset turnover ratio.
E) Calculate Net profit Margin
F) Calculate return on assets for Antoine Hotel using DuPont Analysis
G) The final question will test your brains a bit but remember working capital is current assets less current liabilities. Therefore describe the effects on working capital under the following scenarios:
1) Antoine Hotel decides to issue common stock
2) A restaurant generates revenue on account receivables
3) Antoine Hotel gets a long term loan