Textbook Assignment 1 Financial Statement Analysis Version A

Module/Week 1 (Ch. 3)

Table 3-1

Faith Company

Balance Sheet

Assets

 

Cash and marketable securities

$600,000

Accounts receivable

900,000

Inventories

1,500,000

Prepaid expense

75,000

Total current assets

$3,075,000

Fixed assets

8,000,000

Less: accum depreciation

-2,075,000

Net fixed assets

$5,925,000

Total assets

$9,000,000

 

 

Liabilities

 

Account payable

$800,000

Notes payable

700,000

Accrued taxes

50,000

Total current liabilities

$1,550,000

Long-term debt

2,500,000

Owner’s equity (1 million shares of common stock outstanding)

4,950,000

Total liabilities and owner’s equity

$9,000,000

 

 

Income Statement

Net sales (all credit)

$10,000,000

Less: Cost of goods sold

-3,000,000

Selling and administrative expense

-2,000,000

Depreciation expense

-250,000

Interest expense

-200,000

Earning before taxes

4,550,000

Income taxes

-1,820,000

Net income

$2,730,000

1.      Based on the information in Table 3-1, the current ratio is?

2.      Based on the information in Table 3-1, the quick ratio is?

3.      Based on the information in Table 3-1, the average collection period is?

4.      Based on the information in Table 3-1, the accounts receivable turnover is?

5.      Based on the information in Table 3-1, the debt ratio is?

6.      Based on the information in Table 3-1, the return on assets (ROA) is?

7.      Based on the information in Table 3-1, the times interest earned ratio is?

8.      Based on the information in Table 3-1, assuming that no preferred dividend were paid, the return on common equity is?

9.      Based on the information in Table 3-1, the fixed asset turnover ratio is? 

 

10.  Based on the information in Table 3-1, the total asset turnover is?

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