Ratio analysis :Pro forma balance sheet
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Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc.
Total asset turnover 2 times
Average collection period (assume a 365-day year) 9 days
Fixed asset turnover 5 times
Inventory turnover (based on cost of goods sold) 3 times
Current ratio 2 times
Sales (all on credit) $4.0 million
Cost of goods sold 75% of sales
Debt ratio 50%
Cash _____ Current liabilities _____
Inventory _____ Long-term debt _____
Accounts receivable _____ Common stock plus _____
· Net fixed assets _____ · Retained earnings _____
· Total $_____ · Total $_____
Thanks!
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Solution Summary
Solution showsa pro-forma balance sheet for Carlos Menza, Inc.
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