Ratios					PLEASE NOTE THAT FOR THE DSO RATIO USE 360 DAYS AS OPPOSED TO 365
1)	Construct the Current Assets section of the Balance Sheet from the following:
		Sales (Credit)		1,250,000
		Gross Profit ( 15% of Sales )
		Inventory Turnover		20x
		Current Liabilities		225,000
		Working Capital		(75,000)
		Average Collection Period		27 days
2)	Given the following information & ratios , assemble a Balance Sheet
		Sales ( all on credit )		2,000,000
		Cost of Goods Sold		1,800,000
		Stockholders Equity		250,000
		Long term debt is 70% of total debt
		DSO		18 days
		Inventory Turnover		24x
		Debt/Equity		2.5x
		Current		1x
	Assets			Liabilities & Stockholders Equity
	Cash			Total Current Liabilities
	A/R			Long term Liabilities
	Inventory
	Total Current Assets			Total Liabilities
	Net Plant & Equipment			Total Stockholders Equity
	Total Assets			Total Debt & Stockholders Equity
3)	Construct the following Balance Sheet from the following:
	DSO		10 days
	Sales		4,500,000
	Inventory Turnover		27x
	Cost of Goods Sold		90% of Sales
	Current Ratio		.8X
	Long term debt is equal to two thirds of the total debt
	Creditors own 60% of the assets. Assets total 2MM
	Assets			Liabilities
	Cash			Current Debt
	A/R			Long Term Debt
	Inv
				Total Debt
	Total Current
	Fixed Assets
	Total Assets			Net Worth
4)	Given the following information , please answer the following for the '02 & '03 years.
	As a given , assume the company extends 15 day terms on receivables
	and the industry median for Profit margin is 2% ; for current ratio is 1.5x
	Use ratios to support your answers
	(a) If one of the bank covenants requires a maximum Debt/Equity ratio of 2x; were they in
	compliance for the '03 year. If so how much more could they borrow.
	(b) How long does it take for the company to collect their receivables
			ABC Company
			Income Statement
		For the years ended December 31 , 2002 & December 31,2003
			12/31/2002		12/31/2003
	Sales		5,000,000		5,500,000
	COGS		4,250,000		4,675,000
	Gross Profit		750,000		825,000
	S & G Exp		500,000		550,000
	Depreciation		50,000		75,000
	EBIT		200,000		200,000
	Interest		25,000		20,000
	EBT		175,000		180,000
	Gain /Loss on sale of Assets		0		(150,000)
	Taxes		70,000		12,000
	EAT		105,000		18,000
	Dividends		1,000		1,000
				ABC Company
				Balance Sheet
			12/31/2002		12/31/2003
	Current Assets:
	Cash		125,000		25,000
	A/R		225,000		675,000
	Inventory		100,000		150,000
	Total Current Assets		450,000		850,000
	Net Plant & Equipment		500,000		450,000
	Total Assets		950,000		1,300,000
	Current Liabilities
	A/P		200,000		250,000
	Accrued Expenses		100,000		50,000
	Total Current Liabilities		300,000		300,000
	Long term Liabilities		325,000		558,000
	Total Liabilities		625,000		858,000
	Stockholders Equity
	Common Stock		10,000		30,000
	Capital in excess of Par		65,000		145,000
	Retained Earnings		250,000		267,000
	Total Stockholders Equity		325,000		442,000
	Total Liabilties & Stockholders Equity		950,000		1,300,000