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    Computation of ratios and missing information

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    201-
    Return on Equity = ROE =25%
    Net Profit Margin = NPM=5%
    Total Asset Turnover = TAT=2
    Inventory = $4,000
    Accounts Receivables = $2,500
    Sales = $50,000,
    Current Liabilities = $5,000
    Net Working Capital = NWC = $2,000
    All sales are on credit.
    Assume no prepaid expenses.
    Assume 365 days
    Compute the following:
    1. Debt ratio,
    2. Debt/equity ratio
    3. Equity multiplier
    4. Total assets
    5. Total debt
    6. Long term debt
    7. If total assets comprise of CA and Fixed Assets, compute Fixed Assets
    8. Current ratio, quick ratio
    9. Accounts Receivable Turnover, Average Collection Period
    10. Return on Assets = ROA
    205
    Given the following information for O'Hara Marine Co., calculate the depreciation expense: Sales = $29,000, Costs = $13,000, Transfer to RE = $500, Dividend paid = $900, Interest Expense = $1,600, Tax Rate = 35%
    Hint: first write down the headings for the Income Statement and then work your way from bottom to top, one step at a time.
    Note that, Market price per share is same as price per share is same as market value per share.

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    https://brainmass.com/business/financial-ratios/computation-ratios-missing-information-586255

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    201-
    Return on Equity = ROE =25%
    Net Profit Margin = NPM=5%
    Total Asset Turnover = TAT=2
    Inventory = $4,000
    Accounts Receivables = $2,500
    Sales = $50,000,
    Current Liabilities = $5,000
    Net Working Capital = NWC = $2,000
    All sales are on credit.
    Assume no prepaid expenses.
    Assume 365 days
    Before computing the ratios, we have to find the hidden information.
    Sales = $50,000 and net profit margin = 5% and therefore, net profit = 50,000*5% = $2,500
    Total asset turnover = Sales / Total assets = 50,000/ Total assets = 2; So, total assets = 50,000/2=$25,000
    NWC = Current assets - Current liabilities  Current assets - 5,000 = 2,000; So, current assets = $7,000
    ROE = Net income/Equity = 2,500 / Equity = 25%; So, equity = 2,500/.25 = ...

    Solution Summary

    This solution shows step-by-step computations the determines the required ratios and missing information.

    $2.19