the following questions based on the financials provided: 

 

a. What is the year 2 current ratio?

b. What is the year 2 quick ratio?

c. What is the year 2 inventory turnover?

d. What is the year 2 A/R turnover? (assume 100% of sales are on credit)

e. What are the year 2 number of days sales uncollected? (assume 100% of sales are on credit)

f. What is the year 2 ROA/ROI?

g. What is the year 2 ROE?

h. What is the year 2 debt ratio?

i. What is the year 2 debt to equity ratio?

Transcribed Image Text:

Slayer Inc. Year 2 Income Statement: Sales COGS $ 1,250,000 715,000 535,000 305,000 Required: 1) Compute Current Ratio & Quick Ratio ) Compute the four Efficiency Ratios i) Compute the five Profiotabilty Ratios iv) Compute the three Solvency Ratios Gross Margin Op. Expenses Op. Income 230,000 Loss on Disposal 15,000 Income Before Taxes 215,000 Taxes 65,000 Net Income 150.000 Comparative Balance Sheets: Assets Year 2 Year 1 Cash 40,000 25,000 A/R 205,000 215,000 Inventory 225,000 180,000 Prepaids 25,000 15,000 Total Current Assets 495,000 435,000 Long Term Investments 25,000 15,000 Property, Plant & Equipment 435,000 350,000 Accum. Depreciation (120,000) (80,000) Net Property, Plant & Equipment 315,000 270,000 Total Assets S 835,000 S 720.000 Liabilities A/P 145,000 175,000 Unearned Revenue 20,000 45,000 Total Current Liabilities 165,000 220,000 Long Term Note Payable 140,000 145,000 Total Liabilities 305,000 365,000 Equity Common Stock 370,000 260,000 Retained Earnings 160,000 95,000 Total Owners' Equity 530,000 355,000 Total Liabilities & Equity $. 835.000 $ 720.000 Slayer Inc. Year 2 Income Statement: Sales COGS $ 1,250,000 715,000 535,000 305,000 Required: 1) Compute Current Ratio & Quick Ratio ) Compute the four Efficiency Ratios i) Compute the five Profiotabilty Ratios iv) Compute the three Solvency Ratios Gross Margin Op. Expenses Op. Income 230,000 Loss on Disposal 15,000 Income Before Taxes 215,000 Taxes 65,000 Net Income 150.000 Comparative Balance Sheets: Assets Year 2 Year 1 Cash 40,000 25,000 A/R 205,000 215,000 Inventory 225,000 180,000 Prepaids 25,000 15,000 Total Current Assets 495,000 435,000 Long Term Investments 25,000 15,000 Property, Plant & Equipment 435,000 350,000 Accum. Depreciation (120,000) (80,000) Net Property, Plant & Equipment 315,000 270,000 Total Assets S 835,000 S 720.000 Liabilities A/P 145,000 175,000 Unearned Revenue 20,000 45,000 Total Current Liabilities 165,000 220,000 Long Term Note Payable 140,000 145,000 Total Liabilities 305,000 365,000 Equity Common Stock 370,000 260,000 Retained Earnings 160,000 95,000 Total Owners' Equity 530,000 355,000 Total Liabilities & Equity $. 835.000 $ 720.000

Answer rating: 100% (QA)

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