Financial Ratios
johnson7Textbook 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?
- 9 years ago