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Calculating unknowns using Incomplete Accounting Info

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You are given the following selected financial information:

Income Statement: Balance Sheet:
COGS $750 Cash $250
Net Income $160 Net fixed assets $850

Ratios
ROS 10%
Current Ratio 2.3
Inventory Turnover 6.0 x
ACP 45 days
Debt Ratio 49.12%

Calculate accounts receivable, inventory, current assets, current liabilities, debt, equity, ROA and ROE.

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Solution Summary

This solution shows how you can use incomplete Financial Statement information along with selected accounting ratios to compute various Income Statement and Balance Sheet values. Among the values calculated in this solution are the Accounts Receivable value, the Inventory value, the Total Current Assets, the Total Current Liabilities, Total Debt, and Total Equity. We also show how the information can be used to calculate the Return on Assets and the Return on Equity.

Solution Preview

Using Incomplete financial statement information and ratios to solve for Accounts Receivable, Inventory, Current Assets, Current Liabilities, Debt, Equity, ROA and ROE.

1. ROS - Return on Sales = Income before Interest and Taxes/Sales = 10%
Therefore: Sales would be equal to $160 * 10 = $1,600

2. Inventory Turnover = ...

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