Financial Ratios - Balance Sheet and Income Analysis
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Accounts Payable..............$ 1,800
Accounts Receivable.......... 5,475
Building.............................40,000
Cash........................... 1,125
Capital Stock................... 20,000
Inventory............................ 3,400
Land............................ 10,000
Long-Term Notes Payable.... 27,000
Market Value of Equity........ 90,000
Net Income.................... 7,000
Retained Earnings (ending).... 5,000
Sales............................. 100,000
Short-Term Notes Payable.......2,300
Stockholders' Equity........... 25,000
Unearned Revenue..................3,900
Use the information in the table above to compute the following ratios:
a. Debt Ratio
b. Current Ratio
c. Return on Sales
d. Asset Turnover
e. Return on Equity
f. Price-Earnings Ratio
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Solution Summary
The provided data is reformatted into a balance sheet and income statement. Using the reformatted data, the required ratios are calculated. Solution is provided in both Word .doc and pdf formats.
Solution Preview
The first step is to categorize the data in the table into a balance sheet and statement of income.
Enough data is provided to complete a balance sheet, which is given in the attachment (choose word .doc format or .pdf). Notice that the Total Assets ($60,000) equals the Total Debt + Shareholder's Equity ($60,000) as they must in a balance sheet.
The balance sheet items must be subcategorized into short term and ...
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