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    Mercy Inc. Ratios, Silver Manufacturing Cash Budget

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    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

    ====== ======

    Current Liabilities $ 655 $ 805

    Long Term Liabilities 565 575

    Owners' Equity 840 797

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

    ====== ======

    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

    ---------------------------------------------------------------------------------------------------------

    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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    https://brainmass.com/business/cash-budgeting/mercy-inc-ratios-silver-manufacturing-cash-budget-494233

    Solution Preview

    Your tutorial is attached giving you the ratios, both numerator and denominator, and computing the ...

    Solution Summary

    Your tutorial is attached giving you the ratios, both numerator and denominator, and computing the ratios. I used "average assets" and "average equity" as that is most common. Some books just use current year assets and equity (which you can change and the amounts update automatically). The cash budget is shown including the detail of where the amounts came from (click in cells to see amounts).

    $2.19

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