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143 views2 pagesFinancial Statement Analysis
The document presents the balance sheet of a company with total assets of $300,000 consisting of cash, accounts receivable, inventories, and fixed assets. Total liabilities and owner's equity are also $300,000 consisting of accounts payable, long-term debt, common stock, and retained earnings. Additional data provided includes annual sales of $450,000, cost of goods sold of $337,500, and calculations of various financial ratios such as total asset turnover, days sales outstanding, inventory turnover, debt ratio, and current ratio.
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0% found this document useful (0 votes)
143 views2 pagesFinancial Statement Analysis
The document presents the balance sheet of a company with total assets of $300,000 consisting of cash, accounts receivable, inventories, and fixed assets. Total liabilities and owner's equity are also $300,000 consisting of accounts payable, long-term debt, common stock, and retained earnings. Additional data provided includes annual sales of $450,000, cost of goods sold of $337,500, and calculations of various financial ratios such as total asset turnover, days sales outstanding, inventory turnover, debt ratio, and current ratio.
Uploaded by
BLACKPINKLisaRoseJisooJennieCopyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ASSETS LIABILITIES AND OWNER’S EQUITY
Cash 27,000 Accounts Payable 90,000
Accounts Receivable 45,000 Long-Term Debt 60,000.00
Inventories 90,000 Common Stock 52,500
Fixed Assets 138,000 Retained Earnings 97,500.00
Total Assets 300,000.00 Total Liabilities and 300,000
Owner’s Equity
Sales 450,000.00 Cost of Good Sold 337,500.00
Total Asset Turnover Ratio = Sales / Total Assets
Sales = 300,000 x 1.5 = 450,000
Gross Profit = 450,000 x 25% = 112,500
Cost of Good Sold = Sales – Gross Profit = 450,000 – 112,500 = 337,500
Days Sales Outstanding = (365 x AR) / Sales
Accounts Receivable = (DSO x Sales) / 365 = (36.5 x 450,000) / 365 = 45,000
Inventory Turnover Ratio – Cost of Good Sold / Average Inventory
Inventory = Sales / Inventory Turnover Ratio = 450,000 / 5 = 90,000
Debt Ratio = Total Debt / Total Assets
Total Debt = Debt Ratio x Total Assets = 300,000 x 50% = 150,000
Current Liabilities = Total Debt – Long Term Debt = 150,000 – 60,000 = 90,000
Current Ratio = Current Assets / Current Liabilities
Current Assets = Current Ratio x Current Liabilities = 1.8 x 90,000 = 162,000
Cash = Current Assets – Inventories – Accounts Receivable = 162,000 – 90,000 – 45,000 = 27,000
Fixed Assets = Total Assets – Current Assets = 300,000 – 162,00 = 138,000
Common Stock = Total Liabilities and Owner’s Equity – Total Debt – Retained Earnings
Common Stock = 300,000 – 150,000 – 97,500 = 52,500
Sales = 300,000 x 1.5 = 450,000
Gross Profit = 450,000 x 25% = 112,500
Cost of Good Sold = Sales – Gross Profit = 450,000 – 112,500 = 337,500
Accounts Receivable = (DSO x Sales) / 365 = (36.5 x 450,000) / 365 = 45,000
Inventory = Sales / Inventory Turnover Ratio = 450,000 / 5 = 90,000
Total Debt = Debt Ratio x Total Assets = 300,000 x 50% = 150,000
Current Liabilities = Total Debt – Long Term Debt = 150,000 – 60,000 = 90,000
Current Assets = Current Ratio x Current Liabilities = 1.8 x 90,000 = 162,000
Cash = Current Assets – Inventories – Accounts Receivable = 162,000 – 90,000 – 45,000 = 27,000
Fixed Assets = Total Assets – Current Assets = 300,000 – 162,00 = 138,000
Common Stock = 300,000 – 150,000 – 97,500 = 52,500
The rest left in total liab and OE is equal to 97,500 which is the retained earnings
