Mercy Inc. Ratios, Silver Manufacturing Cash Budget

Mercy Inc. has submitted to you a BS summary data for 2008 and 2009.

The company recorded a Net Income in millions of $212 for 2009

MERCY INC.

Condensed Balance Sheets

December 31, 2008 and 2009

2009 2008

Cash $ 325 $ 300

Marketable Securities 175 175

Accounts Receivable 44 24

Goodwill & Patterns 233 133

Current Assets $ 777 $ 632

Other Assets 1,283 1,545

Total Assets $ 2,060 $ 2,177

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Current Liabilities $ 655 $ 805

Long Term Liabilities 565 575

Owners' Equity 840 797

Total Liabilities & Owners' Equity $ 2,060 $ 2,177

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Based on the information provided, calculate the following financial measures for 2009.

Return on investment (ROI) =
Return on Equity (ROE) =
Working Capital =
Current Ratio =
Acid-Test Ratio =
Debt Ratio =
Debt/Equity Ratio =

2. Complete the "First Quarter Cash Budget" for the following Company with the following disclosed data and industry benchmark rates:
(Math not needed)

January February March

SALES : $ 320,000 $ 372,000 $ 404,000

60% of sales are Cash Receipts in the first month. 40% is received the following month
40% of the December 2008 sales of $ 300,000 are paid in January
Investment Activities: The Company has investments returning $5,500 every month
COGS: 62% of sales
Accounts Payable: January: $ 58,000 February: $ 43,000 March: $ 45,000
The company pays 80% on the month due and 20% the following month.
No accounts payable are due from December 2008.
Interest on notes: Due a week before the end of the quarter = $1,245.00
Income Taxes: Due on February 25, 2009 = $4,500.00
Dividends for the year 2007:
Dividends are paid to the Shareholders on January 01, 2009 = $15,250.00
Payroll: January = $32,750 February = $34,750 March = $36,500
Advertising: The Company has a firm contract with an advertising agency for $50,000
It pays said agency 25% every second month in a quarter.

SILVER MANUFACTURING

Cash Budget

For the First Quarter of 2009

January February March

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Beginning Cash Balance ...... $122,250 $ $

CASH Receipts:

Current Cash Sales $ $ $

Cash Sales from prior month

Investment returns

_________ ___________ ___________

Total Cash Available: $ $ $

CASH Disbursements:

For Cost of Goods sold $ $ $

Current Accounts Payable

A/P due from prior month

Interest on notes

Income Taxes

Dividends Paid

Payroll

Advertising

_________ ____________ ___________

Total Cash Disbursements $ $ $

_________ ____________ ___________

Ending Cash balance $ $ $

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