Use the following industry average ratios, to construct a pro forma balance shee

Question

Use the following industry average ratios, to construct a pro forma balance sheet, for Carlos Menza, Inc. The company's cost of goods sold is The company's total assets are (Round to the nearest dollar.) The company's fixed assets are (Round to the nearest dollar.) The company's accounts receivable is (Round to the nearest dollar.) The company's inventories are (Round to the nearest dollar.) The company's current liabilities are (Round to the nearest dollar.) The company's total liabilities are (Round to the nearest dollar.) Complete Carlos Menza's balance sheet below: (Round to the nearest dollar.)

Explanation / Answer

1. cost of good sold= 76% of sale = 4350000* 76% =3306000

2. Total Asset T/o = 2.3times = net sales/total asset.

                             total asset = 4350000/2.3 = 1891304.35                  

3. Fixed asset T/O = 4.9 times = net sales / fixed asset

                                4350000 / 4.9 = 887755.

4. Inventory T/o ratio = 2.8 times = cost of good sold / Average inventory

                                                   3306000/2.8 = 1180714

5. average collection period = 365/ receviable turnover = 9.5

                  receivable turnover = sale / Av. Account receivable

Av. acccount receivable = 9.5/365 * 4350000

   = 113219

6. current ratio = current asset / current asset

        current asset = total asset - fixed asset

   = 1891304 - 887755      = 1003549

current liabilites = 1003549 / 1.6 = 627218

7. debt ratio = total debt / total asset

                    debt = 1891304 * 47% = 888913

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