BUSI 320 Comprehensive Problem 1 Spring 2019 Use the following information to answer the questions below: note: all sales are credit sales Income Stmt info: 2017 2018 Sales $ 1,000,000 $ 1,100,000 less Cost of Goods Sold: 400,000 424,000 Gross Profit 600,000 676,000 Operating Expenses 350,000 365,750 Earnings before Interest & Taxes 250,000 310,250 Interest exp 25,000 25,500 earnings before Taxes 225,000 284,750 Taxes 90,000 113,900 Net Income $ 135,000 $ 170,850 Balance Sheet info: 12/31/2017 12/31/2018 Cash 25,000 $ 30,000 Accounts Receivable 50,000 $ 51,000 Inventory 125,000 $ 131,250 Total Current Assets $ 200,000 $ 212,250 Fixed Assets (Net) $ 300,000 $ 315,000 Total Assets $ 500,000 $ 527,250 Current Liabilities $ 110,000 $ 121,000 Long Term Liabilities $ 180,000 $ 188,000 Total Liabilities $ 290,000 $ 309,000 Stockholder's Equity $ 210,000 $ 218,250 Total Liab & Equity: $ 500,000 $ 527,250 Compute each of the following ratios for 2017 and 2018 and indicate whether each ratio was getting "better" or "worse" from 2017 to 2018 and was "good" or "bad" compared to the Industry Avg in 2018 (round all numbers to 2 digits past the decimal place) 2017 2018 Getting Better or Getting Worse? 2018 Industry Avg "Good" or "Bad" compared to Industry Avg Profit Margin 0.11 Current Ratio 1.90 Quick Ratio 0.66 Return on Assets .28 Debt to Assets .50 Receivables turnover 18.00 Avg. collection period* 15.50 Inventory Turnover** 9.25 Return on Equity 0.55 Times Interest Earned 11.15 *Assume a 360 day year **Inventory Turnover can be computed 2 different ways. Use the formula listed in the text (the one the text indicates many credit reporting agencies generally use)

BUSI 320 Comprehensive Problem 1 Spring 2019 Use the following information to answer the questions below: note: all sales are credit sales Income Stmt info: 2017 2018 Sales $ 1,000,000 $ 1,100,000...

BUSI 320 Comprehensive Problem 1 Spring 2019
*Use the following information to answer the questions below:*
	note: all sales are credit sales

	Income Stmt info:	2017	2018
	Sales	$ 1,000,000	$ 1,100,000
	less Cost of Goods Sold:	400,000	424,000
	Gross Profit	600,000	676,000
	Operating Expenses	350,000	365,750
	Earnings before Interest & Taxes	250,000	310,250
	Interest exp	25,000	25,500
	earnings before Taxes	225,000	284,750
	Taxes	90,000	113,900
	Net Income	$ 135,000	$ 170,850

	Balance Sheet info:	12/31/2017	12/31/2018
	Cash	25,000	$ 30,000
	Accounts Receivable	50,000	$ 51,000
	Inventory	125,000	$ 131,250
	Total Current Assets	$ 200,000	$ 212,250
	Fixed Assets (Net)	$ 300,000	$ 315,000
	Total Assets	$ 500,000	$ 527,250

	Current Liabilities	$ 110,000	$ 121,000
	Long Term Liabilities	$ 180,000	$ 188,000
	Total Liabilities	$ 290,000	$ 309,000
	Stockholder's Equity	$ 210,000	$ 218,250
	Total Liab & Equity:	$ 500,000	$ 527,250


	Compute each of the following ratios for 2017 and 2018 and
	indicate whether each ratio was getting "better" or "worse" from 2017 to 2018
	and was "good" or "bad" compared to the Industry Avg in 2018
	*(round all numbers to 2 digits past the decimal place)*
		2017	2018	Getting Better or Getting Worse?	2018 Industry Avg	"Good" or "Bad" compared to Industry Avg
	Profit Margin				0.11
	Current Ratio				1.90
	Quick Ratio				0.66
	Return on Assets				.28
	Debt to Assets				.50
	Receivables turnover				18.00
	Avg. collection period*				15.50
	Inventory Turnover**				9.25
	Return on Equity				0.55
	Times Interest Earned				11.15

	*Assume a 360 day year
	**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text
	(the one the text indicates many credit reporting agencies generally use)

Jan 15, 2021BUSI 320

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BUSI 320 Comprehensive Problem 1 Spring 2019 Use the following information to answer the questions below: note: all sales are credit sales Income Stmt info: 2017 2018 Sales $ 1,000,000 $ 1,100,000...

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