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Balance Sheet and Ratios: Example Problems

Use the following information to answer the questions below:

Balance Sheet
(in thousands of dollars)

Cash $150 Accounts Payable $100
Accounts Receivable 250 Notes Payable 250
Inventory 600 Other Current Liabilities 50
Total Current Assets $1,000 Total Current Liabilities $400

Total Fixed Assets 1,500 Long Term Debt $1,100
Common Stock 800
Retained Earnings 200
Total Assets $2,500 Total Liab. & Equity $2,500

Number of shares outstanding = 10,000 shares
Price per Share = $100

Enron Corporation
Income Statement
for the year ending 12/31/XX
(in thousands of dollars)

Net sales $ 2,700
Operating Costs (2,350)
Depreciation (150)
Interest Expense (70)

EBT 130
Income Tax (40%) (52)

Net Income $78

Dividends to Common Stock = $58

Calculate each of the following ratios. Be sure to give the complete equation as well as the solution:

Current ratio
Quick ratio
Total Debt/Total Asset Ratio
Inventory Turnover Ratio
Net Profit Margin
Total Assets Turnover Ratio

Solution Summary

This solution assists with questions on balance sheets and ratios. Accounts receivables are determined.