Explore BrainMass

Explore BrainMass

    Balance Sheet Analysis

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please help with the following problem.

    Balance sheet analysis Complete the balance sheet and sales information that followsusing the following financial data:

    Debt ratio: 50%
    Current ratio: 1.8x
    Total assets turnover: 1.5x
    Days sales outstanding: 36.5 daysa
    Gross profit margin on sales: (Sales - Cost of goods sold)/Sales=_ 25%
    Inventory turnover ratio: 5x

    Calculation is based on a 365-day year.

    Balance Sheet
    Cash ______ Accounts payable _____
    Accounts receivable ______ Long-term debt 60,000
    Inventories ______ Common stock _____
    Fixed assets ______ Retained earnings 97,500
    Total assets $300,000 Total liabilities and equity _____
    Sales _____ Cost of goods sold _____

    © BrainMass Inc. brainmass.com December 15, 2020, 3:01 pm ad1c9bdddf


    Solution Preview

    Dear Student,
    Solution to your problem is provided in a separate excel file attached herewith. The solution is prepared in two parts.
    Part 1- Full workings for Sales, COGS,Inventory,Total Debt,Account payable,Common stock,Current assets,Fixed assets,Account receivable and Cash Balance etc.

    1 Sales:
    Let X be Sales
    Total asset turnover = Sales/Total assets
    1.5= X/$300000
    X= 300000X1.5 = $450000

    2 Gross Profit margin
    let X be Gross profit margin
    Gross profit margin = Gross profit/sales
    .25 = X/ 450000
    X= .25 X 450000
    X= $112500

    3 Cost of Goods ...

    Solution Summary

    The solution answers the question below involving balance sheet analysis problems.