Share
Explore BrainMass

Financial Analysis: Using ratios and data, prepare an income statement, balance sheet

Financial reports for 20X3:

Stock price $18.37
Inventory balance $300000
Expenses(excluding OGS) $1120000
Shares outstanding 290000
Average issue price of shares $5.00
Gross margin 40%
Interest rate 8%
TIE ratio 8
Inventory turnover 12X
Current ratio 1.5
Quick ratio .75
Fixed asset turnover 1.5

Q.
Complete the following abbreviated financial statements and calculate per share ratios indicated. (Hint: Start by subtracting the formula for the quick ratio from that for the current ratio and equating that to the numerical difference.)

Income Statement

Revenue
COGS
GM
Expense
EBIT
Interest
EBT
Tax
EAT

Balance Sheet

Current assets
Fixed assets
Total assets

Current liabilities
Long-term debt
Equity:
Paid-in capital(Common stock + Paid-in excess)
Retained earnings

Total equity
Total liabilities & equity

Ratios

Book value per share
Market value per share

Solution Preview

See attached file.

Computations:
Inventory= Current Ratio- Quick Ratio
300000= 1.25-.75
Numerical difference for .5 = 300000
For Current Assets =1.25= 300000*1.25/.5
$750,000.00
For Current Liabilities=.75= 300000*.75/.5
$450,000.00

Cost of Goods Sold= Inventory * Inventory turnover
= 12* ...

Solution Summary

With good explanations and calculations, the problem is solved.

$2.19