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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 $_____

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Solution showsa pro-forma balance sheet for Carlos Menza, Inc.

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