Below are the two most recent balance sheets and most recent income statement for Orca Industries. The
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Question:
Below are the two most recent balance sheets and most recent income statement for Orca Industries. The company has an effective tax rate of 35%.
Balance Sheet | ||
2011 | 2010 | |
Assets: | ||
Cash | $10,000 | $6,000 |
Accounts Receivable (net) | 6,000 | 1,500 |
Inventory | 8,000 | 10,000 |
Long-lived assets | 12,000 | 11,000 |
Less: Accumulated depreciation | (4,000) | (2,000) |
Total assets | $32,000 | $26,500 |
Liabilities and Stockholders' Equity: | ||
Accounts payable | $5,000 | $6,000 |
Deferred revenues | 1,000 | 2,000 |
Long-term note payable | 10,000 | 10,000 |
Less: Discount on note payable | (800) | (1,000) |
Common stock | 12,000 | 6,000 |
Retained earnings | 4,800 | 3,500 |
Total liabilities and stockholders' equity | $32,000 | $26,500 |
Income Statement | ||
For the year ended December 31, 2011 | ||
Revenues | $42,000 | |
Cost of goods sold | (24,000) | |
Depreciation expense | (2,000) | |
Interest expense | (3,000) | |
Bad debt expense | (2,000) | |
Other expense (including income taxes) | (9,000) | |
Net income | $2,000 |
Calculate:
-return on common shareholders' equity,
-profit margin for computing ROA
-accounts receivable turnover (assume that Orca makes all sales on account)
-basic earnings per share
Related Book For
International Financial Statement Analysis CFA Institute Investment Series
ISBN: 9780470287668
1st Edition
Authors: Thomas R. Robinson, Hennie Van Greuning CFA, Elaine Henry, Michael A. Broihahn, Sir David Tweedie
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