Just dew it Corporation reports the following balance sheet information for 2008
ID: 2729217 • Letter: J
Question
Just dew it Corporation reports the following balance sheet information for 2008 and 2009. Preparing Standardized Financial Statements Prepare the 2008 and 2009 common-size balance sheets for Just Dew It. Preparing Standardized Financial Statement Prepare the 2009 common-base ear balance beet for Just Dew It. Preparing Standardized Financial Statements Preface the 2009 combined cotwnon-size. common-base year balance sheet for Just Dew It d. Sources and Use of Cash For each account on this compm/s balance sheet show the change in the account du-.ng 2009 and note whether this change was a source or use of cash. Do up and make vense" explain your answer for total assets as compared to)our answer for total liabilities and owner.' equity. Calculate the following financial ratios for each year: Current ratio. Quick ratio. Cash ratio. NWC to total assets ratio. Deft-equity ratio and equity multiplier. Total debt ratio and long-term debt ratio. Du Pont IdentityExplanation / Answer
a.Common size Balance sheet for Just Dew It for 2008 and 2009
Assets Liabilities and owner equity
A Common size Balancesheet is a balancesheet in which each line item is expressed as a percentage of assets/Liabilities.
b.2009 Common Base year balancesheet for Just Dew It
The representing of accounting information over multiple year as a percentage of initial year.
Common Base year analysis helps us to identify trend analysis.
It is caluculated as under
Coomon Base year cash in 2009=cash in 2009/cash in 2008
Assets Liabilities and owner equity
c.2009 Combined Common Size and common base year for Just Dew It.
Combined common size (Cs)and common base year (CBY)yeils invoves taking ratios of Common size ratios.
for Example,
Cash in 2008 is 8436 or 2.87%of Assets and cash in 2009 is 10157 or 3.13%of Assets.
If 2008 is base year,CBY cash in 2009=10157/8436=1.21
Combined CS and CBY of cash in 2009 =3.13/2.87=1.09
Assets Liabilities and owner equity
d.
e.Ratios for year 2008
a)Current Ratio=Current assets/Current liabilities=68726/61434=1.12
b)Quick ratio=Liquid assets / Current liabilities=(8436+38760)/61434=0.76
c)Cash ratio=(Cash equilents+marketable securities)/current liabilities=8436/61434=0.14
d)NWC to Total Assets Ratio=Net working capital/Total Assets=(CA-CL)/TA=(68726-61434)/295432=0.025
e)Debt equity Ratio=Toatl Debt/Total Equity shareholders fund=25000/40000=0.625
Equity Multiplier=Total assets/Share holdesr equity=295432/40000=7.39
f)Total Debt ratio=Total Debt/Total Liabilities=25000/295432=0.084
Long term debt ratio=LOng term debt ratio/total liabilities=25000/295432=0.084
2008 2009 2008 2009 Current Assets Current Liabilities Cash 2.87 3.13 Accounts payable 14.57 14.43 Accounts Receivable 7.29 7.21 Notes Payable 6.22 5.36 Inventory 13.12 13.14 Long Term Debt 8.46 9.86 Net Plant & Equipment 76.72 76.52 Common Stock 13.54 12.33 Retained Earnings 57.21 58.02 100 100 100 100Related Questions
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