ratios and vertical/horizontal analysis

Project Description:

additional information:
natalie and curtis are thinking about borrowing an additional $20,000 to buy more
kitchen equipment. the loan would be repaid over a 4-year period. the terms of the loan
provide for equal semi-annual payments of $2,500 on may 1 and november 1 of each
year, plus interest of 5% on the outstanding balance.
instructions
(a) calculate the following ratios for 2013 and 2014.
1. current ratio
2. debt to total assets
3. gross profit rate
4. profit margin
5. return on assets (total assets at november 1, 2012, were $33,180.)
6. return on common stockholders’ equity (total common stockholders’ equity at
november 1, 2012, was $23,180. dividends on preferred stock were $16,800 in
2013 and $18,000 in 2014).
(b) prepare a horizontal analysis of the income statement for cookie & coffee creations
inc. using 2013 as a base year.
(c) prepare a vertical analysis of the income statement for cookie & coffee creations
inc. for 2014 and 2013.
(d) comment on your findings from parts (a) to (c).
(e) what impact would borrowing an additional $20,000 to buy more equipment have
on each of the ratios in (a) above, assuming that no changes are expected on the
income statement and balance sheet? comment on your findings.
(f) what would justify a decision by cookie & coffee creations inc. to buy the additional
equipment? what alternatives are there instead of bank financing?
Skills Required:
Project Stats:

Price Type: Negotiable

Completed
Total Proposals: 6
1 Current viewersl
8 Total views
Project posted by:

Proposals

Proposals Reputation Price offered
  • 5.0
    2 Jobs 2 Reviews
    $0 in 0 Day
  • 4.8
    546 Jobs 386 Reviews
    $20 in 0 Day
  • 4.9
    73 Jobs 54 Reviews
    $0 in 0 Day
  • 4.4
    12 Jobs 9 Reviews
    $30 in 0 Day
  • 4.4
    31 Jobs 22 Reviews
    $50 in 0 Day