The balance sheet and income statement for the A. Thiel Mfg. Company are as follows: Balance Sheet
Question:
The balance sheet and income statement for the A. Thiel Mfg. Company are as follows:
Balance Sheet ($000)
Cash ........................................... $ 500
Accounts receivable ......................... 2,000
Inventories .................................... 1,000
Current assets ............................... $3,500
Net fixed assets .............................. 4,500
Total assets .................................. $8,000
Accounts payable ........................... $1,100
Accrued expenses .............................. 600
Short-term notes payable ..................... 300
Current liabilities ........................... $2,000
Long-term debt ............................... 2,000
Owners' equity ............................... 4,000
Total liabilities and owners' equity ....... $8,000
Income Statement ($000)
Sales (all credit) .......................................... $8,000
Cost of goods sold ..................................... (3,300)
Gross profit ............................................... $4,700
Operating expenses (includes $500 depreciation) .. (3,000)
Operating profits ........................................ $1,700
Interest expense ........................................... (367)
Earnings before taxes .................................. $1,333
Income taxes (40%) ...................................... (533)
Net income ................................................ $ 800
Calculate the following ratios:
Current ratio ..................................... Operating return on assets
Times interest earned ............................................... Debt ratio
Inventory turnover ....................................... Days in receivables
Total asset turnover ..................................... Fixed-asset turnover
Operating profit margin ...................................... Return on equity
Asset TurnoverAsset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Foundations Of Finance
ISBN: 9780134083285
9th Edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty