Balance Sheet Analysis
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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
a
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 _____
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The solution answers the question below involving balance sheet analysis problems.
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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 ...
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