ACCT 301 ACCT301 Week 3 Problem 1 and Problem 2 (Ratios Analysis)
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Problem 1 | |||||
Required:Express each income statement component as a percentage of sales, and comment on the trends in each line from 2012 to 2013. | |||||
2013 | % Sales | 2012 | % Sales | Comments | |
Sales | $ 1,000,000 | $ 1,200,000 | |||
Cost of goods sold | $ 450,000 | $ 600,000 | |||
Gross margin | $ 550,000 | $ 600,000 | |||
Operating expenses | $ 600,000 | $ 450,000 | |||
Net income | $(50,000) | $ 150,000 |
Problem 2 | ||||
Required:Compute (1) accounts receivable turnover for 2013, (2) the inventory turnover for 2013, and (3) the net margin for 2012. | ||||
Balance sheet items | 2013 2012 | |||
Accounts receivable | $ 380,000.00 | $ 376,000.00 | ||
Allowance for doubtful accounts | $ (20,000.00) | $ (16,000.00) | ||
Net accounts receivable | $ 360,000.00 | $ 360,000.00 | ||
Inventory | $ 480,000.00 | $ 440,000.00 | ||
Income statement items | ||||
Sales | $ 3,400,000.00 | $ 3,080,000.00 | ||
Cost of goods sold | $ 1,600,000.00 | $ 1,440,000.00 | ||
Operating expenses | $ 780,000.00 | $ 680,000.00 |
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