Using below information:

 (1). Construct an accrual basis Income Statement.
 (2). Compute the following financial measures. You may need the results from (1).
a. current ratio
 b. working capital
 c. debt to asset ratio
 d. equity to asset ratio
 e. Operating profit margin ratio f. rate of return on assets
 g. Rate of return on equity
 h. EBITDA
 i. total asset turnover ratio
(3). Conduct the Dupont analysis to identify strengths and weaknesses of the farm business.

 

Transcribed Image Text:

BALANCE SHEET Cash Accounts Receivable Inventories Supplies Total Current Assets Machinery Less: Acc. Depr. Real Estate Total Assets Accounts Payable Operating Loan Accrued Expenses Accrued Interest Payable Current Portion Term Debts Total Current Liabilities Long Term Liabilities Total Liabilities Net Worth Beginning 225000 180000 255000 280000 940000 880000 -175000 980000 2625000 270000 270000 80000 196000 100000 916000 860000 1776000 849000 Ending 320000 Cash Operating Income 360000 Borrow on Oper. Loan 880000 155000 1715000 1030000 -300000 980000 3425000 405000 470000 45000 261000 140000 1321000 820000 2141000 CASH FLOW 1284000 Total Cash Receipts Cash Operating Expenses Interest Payments Family Living Withdrawals Payments on Oper. Loan Capital Purchases Total Cash Expenditures Net Cash Flow 1525000 200000 1725000 1369120 46880 64000 0 150000 1630000 95000 BALANCE SHEET Cash Accounts Receivable Inventories Supplies Total Current Assets Machinery Less: Acc. Depr. Real Estate Total Assets Accounts Payable Operating Loan Accrued Expenses Accrued Interest Payable Current Portion Term Debts Total Current Liabilities Long Term Liabilities Total Liabilities Net Worth Beginning 225000 180000 255000 280000 940000 880000 -175000 980000 2625000 270000 270000 80000 196000 100000 916000 860000 1776000 849000 Ending 320000 Cash Operating Income 360000 Borrow on Oper. Loan 880000 155000 1715000 1030000 -300000 980000 3425000 405000 470000 45000 261000 140000 1321000 820000 2141000 CASH FLOW 1284000 Total Cash Receipts Cash Operating Expenses Interest Payments Family Living Withdrawals Payments on Oper. Loan Capital Purchases Total Cash Expenditures Net Cash Flow 1525000 200000 1725000 1369120 46880 64000 0 150000 1630000 95000

Answer rating: 100% (QA)

1 Income statement Operating Revenues Cash Operating Income 1525000 Net Cash Flow 95000 Operating Expenses Cash Operating Expenses 1369120 Interest Payments 46880 Family Living Withdrawals 64000 Net I... View the full answer