Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis
Question:
Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, Year 5):
Retained earnings, December 31, Year 4 . . . . . $98,000
Gross profit margin ratio . . . . . . . . . . . . . . . . . 25%
Acid-test ratio . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 to 1
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . $280,000
Days’ sales in inventory . . . . . . . . . . . . . . . . . . 45 days
Days’ sales in receivables . . . . . . . . . . . . 18 days
Shareholders’ equity to total debt . . . . . . 4 to 1
Sales (all on credit) . . . . . . . . . . . . . . . . . $920,000
Common stock: $15 par value; 10,000 shares issued and outstanding; issued at $21 per share
Required:
Using these data, construct the December 31, Year 5, balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for Year 5) are $180,000. The tax rate is 40%.
Assume a 360-day year in ratio computations. No cash dividends are paid in either Year 4 or Year 5. Current assets consist of cash, accounts receivable, and inventories.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild