# Calculate: Accounting Finance

Computations: The following financial statements apply to the next six problems?

Robert Manufacturing

Balance Sheet

December 31, XXXX

Cash $ 200

Receivables 245

Inventory 625

Total Current Assets $ 1,070

Net Fixed Assets 1,200

Total Assets $ 2,270

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Accounts Payable $ 205

Notes Payable 425

Other Current Liabilities 115

Total Current Liabilities $ 745

Long-term Debt . 420

Total Liabilities $ 1165

Common Equity 1105

Total Liabilities and Capital $2,270

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Robert Manufacturing

Income Statement

For Year ended December 31, XXXX

Sales $ 2,400

Cost of Goods Sold (1,834)

Gross Profit $ 566

Selling Expenses 175

General and Administrative Expenses 216

Earnings Before Interest and taxes (EBIT) $ 175

Less Interest Expense 35

Earnings Before Taxes (EBT) $ 140

Less Taxes (40%) 56

Net Income $ 84

Earning Per Share $ 8.40

Price $40

Questions:

1. Calculate the current ratio.

2. Calculate the debt ratio.

3. Calculate profit margin on sales

4. Return on total assets.

5. Calculate the Inventory ratio.

6. Calculate the price earnings ratio.

https://brainmass.com/business/finance/calculate-accounting-finance-136071

#### Solution Preview

1. Calculate the current ratio.

Current Ratio = Current Assets/Current Liabilities

Current Assets = 1,070

Current Liabilities = 745

Current Ratio = 1,070/745 = 1.44

2. Calculate the debt ratio.

Debt Ratio = Total Liabilities/Total ...

#### Solution Summary

This solution explains the calculation of various ratios, including the current ratio, debt ratio, profit margin on sales, return on total assets, Inventory ratio and price earnings ratio. All calculations are included.