PLEASE INCLUDE ALL THE CALCULATIONS OF THE PROBLEMS*** CALCULATIONS ARE VERY IMP

Question

PLEASE INCLUDE ALL THE CALCULATIONS OF THE PROBLEMS*** CALCULATIONS ARE VERY IMPORTANT

NOTE: If you do not include the calculations you will not receive the full credit even if the result is correct.

1. Prepare and interpret an analysis of the financial ratios showing the company.

2. Summarize your findings and make recommendations.

3. Use the Du Pont method explained in the material of this module for performance

on equity. What does this result?

Comment:

PLEASE INCLUDE ALL THE CALCULATIONS OF THE PROBLEMS*** CALCULATIONS ARE VERY IMPORTANT

Zumba Production Inc.'s income statement and balance sheet for 20x7 are presented below Zumba Production Inc. Income Statement Year Ended December 31, 20x7 $160,000 Sales Cost of Goods Solds Merchandise Inventory, Jan. 1, 2013 Purchases (net) Goods Available for Sale Merchandise Inventory, Dec. 31, 2013 S 208,400 37,320 S 171,080 65,080 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Other Income and Expense 106,000 S 54,000 37,000 S 17,000 Interest Expense Income before Tax Income Tax Expense 6,100 $ 10,900 4,360 Net Income $ 6,540

Explanation / Answer

a. Current Ratio=Current Asset/ Current Liabilites=(500+1000+25000+45500)/22000=3.27

b. Quick Ratio=(500+1000+25000)/22000=1.66

c. Inventory Turnover=160000/45500=3.52

d.Average Collection Period=receiveable/Sales=22000/160000=.1375*365=49.5 days

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