Refer to exhibits C2.1 and C2.2 to use the data to evaluate current ratio, quick ratio, debt ratio, times interest earned, payables turnover, receivables turnover, inventory turnover, return on equity, return on sales, payables conversion period, receivables conversion period, inventory conversion period, and cash conversion cycle. Then comment on the financial strength or weakness of the corporation based on these ratios and cycles. Provide in-text citations and explain in detail.

 

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EXHIBIT C2.1 KF Income Statements: 2012-2013 Sales Cost of goods sold Gross margin Administrative Depreciation Earnings before interest and taxes Interest Earnings before taxes Taxes (at 40%) Net income Assets Cash Accounts receivable Inventory Other current Current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets EXHIBIT C2.2 KF Balance Sheets: 2012-2013 Liabilities and Net Worth Accounts payable Notes payable Accruals 2012 $6,572,800 4,896,700 $ 1,676,100 1,281,700 72,000 $322,400 Current liabilities Long-term debt Common stock (62,000 shares outstanding) Retained earnings Total liabilities and net worth 37,900 $ 284,500 113,800 $ 170,700 2012 $ 328,000 $1,004,200 $ 765,400 $ 39,200 $2,136,800 $ 372,200 ($ 147,900) $ 224,300 $2,361,100 $ 345,700 $ 63,200 $164,300 $ 573,200 $ 316,000 $948,000 $ 524,000 $2,361,200 2013 $7,811,500 5,866,200 $1,945,300 1,492,200 86,000 $367,100 31,600 $ 335,500 134,200 $ 201,300 2013 $244,000 $1,106,600 $1,222,300 $46,800 $ 2,619,700 $493,600 ($ 233,800) $ 259,800 $2,879,500 $544,800 $ 63,200 $156,100 $ 764,100 $ 252,800 $ 1,137,600 $ 725,000 $2,879,500 EXHIBIT C2.1 KF Income Statements: 2012-2013 Sales Cost of goods sold Gross margin Administrative Depreciation Earnings before interest and taxes Interest Earnings before taxes Taxes (at 40%) Net income Assets Cash Accounts receivable Inventory Other current Current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets EXHIBIT C2.2 KF Balance Sheets: 2012-2013 Liabilities and Net Worth Accounts payable Notes payable Accruals 2012 $6,572,800 4,896,700 $ 1,676,100 1,281,700 72,000 $322,400 Current liabilities Long-term debt Common stock (62,000 shares outstanding) Retained earnings Total liabilities and net worth 37,900 $ 284,500 113,800 $ 170,700 2012 $ 328,000 $1,004,200 $ 765,400 $ 39,200 $2,136,800 $ 372,200 ($ 147,900) $ 224,300 $2,361,100 $ 345,700 $ 63,200 $164,300 $ 573,200 $ 316,000 $948,000 $ 524,000 $2,361,200 2013 $7,811,500 5,866,200 $1,945,300 1,492,200 86,000 $367,100 31,600 $ 335,500 134,200 $ 201,300 2013 $244,000 $1,106,600 $1,222,300 $46,800 $ 2,619,700 $493,600 ($ 233,800) $ 259,800 $2,879,500 $544,800 $ 63,200 $156,100 $ 764,100 $ 252,800 $ 1,137,600 $ 725,000 $2,879,500

Answer rating: 100% (QA)

Workings For Calculation of Given Ratios TotalLiabilitiesin2012CurrentLiabilities LongTermDebt573200316000889200 TotalLiabilitiesin20137641002528001016900 ShareholdersEquityin2012CommonStock RetainedE... View the full answer