Sales /Total Assets 3

Sales/Fixed assets 5
Sales/Current Assets 7.5
Sales/Inventory 20
Sales/Debtors 15
Current Ratio 2
Total Assets/ Net worth 2.5
Debt/Equity 1
Balance sheet
Liabilities Amount Assets Amount
Net Worth Fixed assets
Long-Term Debt Inventories
Current Liabilities Debtors
Liquid Assets
Total Liabilities Total Assets

Question # 2: Using the following information complete the balance sheet given below:

Gross profit (20% of sales) 60,000

Shareholders’ equity 50,000
Credit Sales to total sales 80%
Total assets turnover 3 times
Inventory turnover (to cost of sales) 8 times
Average collection Period (360 days year) 18 days
Long term debt equity 40 %
Current Ratio 1.6
Balance sheet

Liabilities Amount Assets Amount

Creditors Fixed assets
Long-Term Debt Cash
Shareholder’s equity Debtors
Inventories
Total Liabilities Total Assets
Question # 3: Using the following information complete the balance sheet given below:

Current Ratio 2.5

Quick Ratio 1.5
Net working capital 30,000
Stock turnover ratio (cost of sales/closing stock) 6 times
Gross profit ratio 20%
Fixed Assets turnover ratio (on cost of sales) 2 times
 Debtors turnover ratio 2 months
Fixed Assets to Shareholders Net worth 0.80
Reserves and surplus to capital 0.50

Balance sheet
Liabilities Amount Assets Amount
Share capital Fixed assets
Reserves Cash /bank
Long term loans Debtors
Current Liabilities Inventories
Total Liabilities Total Assets

Question # 4: Using the following information completes the balance sheet given below:
All sales are on credit.
Long term debt to net worth 0.5 to 1
Total Assets turnover 2.5
Average collection period (360 days in a year) 18 days
Inventory turnover 9 times
Gross profit margin 10%
Acid test ratio 1to 1

Balance sheet

Liabilities Amount Assets Amount

Notes and payables 100,000 Cash /bank
Long term debt Account receivables
Common stock 100,000 Inventories
Retained earnings 100,000 Plant and equipment
Total Liabilities and equity Total Assets

Question # 5: From the following information prepare the balance sheet of Creeam
Limited.
Stock Turnover 6 times
 Capital Turnover 4 times
Fixed assets Turnover 8 times
Gross Profit ratio 25 percent
Debt Collection Period (months) 2.5 months
Creditors payment period (days) 45 days
The gross profit for the year was Rs. 80,000. Closing stock was Rs 10,000 in excess of the
opening stock.

Balance sheet of Creeam Limited

Liabilities and Equity Rs. Assets Rs.
Capital Fixed Assets (Net)
Creditors Closing Stock
Bank Overdraft Debtors
Total Liabilities and Equity Total assets

Question # 6: Prepare profit and loss account from the following data of jamil
limited
Gross profit percentage of sales 36%
Merchandise turnover 20 times
Average inventory 9600
Average account receivable 100000
Income tax rate 40%
Net income after tax as percentage of sales 12%

Question # 7:
Current ratio 2.5
Quick ratio or acid-test 2.0
 Current liabilities $400,000
Inventory turnover 3 times
Required: Determine the cost of sales of a firm with the above financial data.

Question # 8: You are working as the financial analysist of Passo Electric Company. The
following data are available for your financial analysis (unless otherwise indicated, all data are as
of December 31, Year 2)
Current Ratio 2 Day’s Sales in Inventory 36 days
Account receivable turnover 16 Gross Profit Margin Ratio 50%
Beginning account receivable $50,000 Expenses(excluding cost of goods sold) $450,000
Return on end of year common equity 20% Total debt to equity ratio 1
Sales (all on credit) $1,000,000 Noncurrent assets $300,000

Required:
Using the data provided, construct the December 31, Year 2, balance sheet for your analysis.
Current assets consist of cash, account receivables, and inventory, Balance sheet classification
include cash, account receivable, inventory, total noncurrent assets, total current assets, total
current liabilities, total noncurrent liabilities, and equity.

Question # 9: The following information has been provided by the General Motors Limited.
Gross profit ratio 25%
Net profit/Sales 20%
Sales/Inventory 10
Fixed Assets/Total Current assets 5/7
Current Ratio 1
Fixed Assets/share Capital 5/4
Fixed assets $ 10,00,000
Closing Stock $ 100,000

Required:
With the help of the information given above prepare
1. Trading profit and loss account
2. and balance sheet of General Motors Limited.

Question # 10: The following information has been provided by the Suleman Motors Limited.

Debt ratio: 50%

 Current ratio: 1.8
Total assets turnover: 1.5
Days sales outstanding: 36.5 days
Gross profit margin on sales: (Sales − Cost of goods sold)/Sales = 25%
Inventory turnover ratio: 5
Calculation is based on a 365-day year.

Balance Sheet
Cash Accounts payable
Accounts receivable Long-term debt 60,000
Inventories Common stock
Fixed assets Retained earnings 97,500
Total assets $300,000 Total liabilities and equity

Sales 450,000 Cost of goods sold 337500

Required: Complete the balance sheet and sales information using the following financial data:
1.5 = Sales/Total Assets
1.5 = Sales/300,000
Sales =1.5*300,000=450,000
G.P=450,000*25/100=112500
Cost of goods sold= Sales –Gross profit=450000-112500=337500

Question # 11: The following information has been provided by the National Motors Limited.

Debtor’s Velocity 3 months

Stock Velocity 8 months
 Creditor’s Velocity 2 months
Gross Profit Ratio 25 percent
Gross Profit Rs. 4,00,000
Bill Receivable Rs. 25,000
Bill Payable Rs. 10,000
Closing stock for the year is Rs. 10,000 above the opening stock.
Required: Calculate the amount of the following:
1. Amount of Sales. (16,00,000)
2. Sundry Debtors. (400,000-25,000= 375,0000
3. Closing Stock. (8,05,000)
4. Sundry Creditors. (2.01,667-10,000).

0.25=400,000/Sales= 16,00,000

Question # 12: The following information has been provided by the Pak Suzuki Motors Limited.

Gross Profit Ratio 25 percent

Net Profit Ratio 20 percent
Stock Turnover Ratio 10 Times
Net Profit/Capital 1/5
Capital to Total Liabilities 1/2
Fixed assets/Capital 5/4
Fixed Assets/Total Current Assets 5/7
Fixed Assets Rs. 10,00,000
Closing Stock Rs, 100,000

Required: You are required to calculate:

1. Prepare trading and profit and loss account
2. a Balance Sheet from the above data.:

Question # 13: The following information has been provided by the Saad Motors Limited.
Complete the balance sheet and sales information using the following financial data:

Debt ratio: 50%

Current ratio: 1.8
Total assets turnover: 1.5
 Days sales outstanding: 36.5 days
Gross profit margin on sales:
(Sales − Cost of goods sold)/Sales 15%
Inventory turnover ratio: 6
Calculation is based on a 360-day year.

Balance Sheet
Cash Accounts payable
Accounts receivable Long-term debt 60,000
Inventories Common stock
Fixed assets Retained earnings 97,500
Total assets $300,000 Total liabilities and equity

Sales Cost of goods sold

Question # 14: The following information concerning the financial results for the Imhoff
Corporation for 1997 is available:

Current ratio = 3.0 times

Current liabilities = $500,000
Net working capital to sales ratio = 10%
Total asset turnover = 2.0 times

Required:
a. What is the dollar amount of Imhoff’s sales?
b. What is the amount of Imhoff’s 1997 total assets?
c. What is the amount of Imhoff’s 1997 net working capital?
Solution:
Current ratio= current assets/current liabilities
3=Current asset/500,000
Current assets =15,00,000
Net working capital – current assets- current liabilities= 15,00,000-500,000=10,00,000
0.10 =10,00,000/Sales = 10,000,000
Total assets turnover = sales/total assets
2=10,000,000/Total assets
Total Assets= 5,000,000

Question # 15: Complete the following balance sheet for the Fisk Company for 2019:
Cash $50,000 Current liabilities $
Accounts receivable 50,000 Long-term debt
Inventory Shareholders’ equity
Plant and equipment
Total assets $ Liabilities and equity $

The following information is also available:

Quick ratio = 1.0 time
Net working capital to sales ratio = 10%
Total asset turnover = 2 times
Sales = $2 million
Debt to assets = 50%