Ratio Analysis 1. Fill out the balance sheet and other information in the table
ID: 2334833 • Letter: R
Question
Ratio Analysis 1. Fill out the balance sheet and other information in the table below for the Morales Well Supply Company. These ratios are sufficient for you to derive the missing information: Debt Ratio-50% Current Ratio 2x, Total Asset Turnover 1.6x, Gross Profit Margin-40%, Inventory Turnover 5x Days Sales Outstanding - 36.5 days Net Profit Margin-10% Cash Accounts ReceivableAccounts Payable Inventory Fixed Assets Total Assets Long Term Deb t Common Stock Retained Earnings 100,000 20,000 500.000 Total Claims Sales Cost of Goods Sold Net IncomeExplanation / Answer
A)Total asset turnover =sales /total asset
1.6 = sales /500000
sales = 1.6 *500000
= 800000
b)cost of goods sold =sales(1-gross profit margin)
= 800000(1-.40)
= 480000
c)Net Income =sales *net profit margin
= 800000*10%
= $ 80000
2)Debt ratio = debt /total asset
50% =Debt /500000
.50 *500000 = Debt
Debt = 250000
Accounts payable =Total debt -long term debt
= 250000-100000
= 150000
3)Total asset =Total Debt+ total equity
500000= 250000+total equity
Total equity = 500000- 250000
=250000
Retained earning = Total equity - common stock
= 250000 -20000
= 230000
4)Inventory turnover= sales /inventory
5 = 800000/inventory
inventory = 800000/5 = 160000
5)days sales outstanding= 365 *receivable/ sales
36.5 = 365 *R/800000
36.5*800000/365 =R
Accounts receivable = 80000
6)current ratio = current asset/ current liabilities
2 = CA /150000
2*150000 =CA
Current asset = 300000
cash = current asset -inventory -receivable
= 300000-160000-80000
= 60000
Fixed asset =total asset -current asset
= 500000-300000
= 200000
cash 60000 Accounts payable 150000 Accounts receivable 80000 long term debt 100000 inventory 160000 common stock 20000 fixed asset 200000 retained earning 230000 total asset 500000 total claim 500000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.