Question: Assume you are an analyst evaluating Mesco Company The following

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.



$1.99
Sales0
Views84
Comments
  • CreatedJanuary 22, 2015
  • Files Included
Post your question
5000