Question 1Score0
Using the Income Statement and Balance Sheet below determine the following financial evaluations. Put answers using equations in the cells under “Answers” in Column C.
Answers
aMarket capitalization
bCurrent ratio
cQuick Ratio
dDebt Ratio
eEarnings per share (EPS)
fPrice Earnings Ratio (PE)
gProfit Margin
hBriefly, within the space provided below, discuss implications of the above answers.
Income StatementYear xBalance SheetYear x
Revenue$15,000,000Assets
Returns, Credits, etc.($5,000)Current Assets
Net Sales (Revenue)$14,995,000Cash$80,000
Direct CostsAccounts receivable$60,000
Labor($4,000,000)Finished Goods Inventory$40,000
Materials($2,500,000)Materials Inventory$60,000
Cost of Goods Sold (COGS)($6,500,000)Total Current Assets$240,000
Gross Margin$8,495,000
Selling General and Admin.Long term Assets
Marketing($1,250,000)Buildings$10,000,000
Research and Development($1,000,000)Furniture$3,000,000
Administration($750,000)Other$1,500,000
Other($500,000)Total Fixed Assets$14,500,000
Depreciation($250,000)Total Assets$14,740,000
S G & A($3,750,000)
Earnings Before Interest and Taxes (EBIT)$4,745,000Liabilities
Interest Expense/Income($162,300)Current Liabilities
Pre-tax Income$4,582,700Notes Payable$100,000
Income Tax @ 30%($1,374,810)Accounts Payable$125,000
Net Income$3,207,890Taxes Payable$10,000
Total Current Liabilities$235,000
Long Term Liabilities
Bank Loans @ 6%$455,000
Current Stock Price$28.00Mortgage @ 4.5%$3,000,000
Current Outstanding Shares600,000Total Long Term Liabilities$3,455,000
CapitalStock$9,900,000
Retained Earnings$1,150,000
Stockholders Equity$11,050,000
Total Liabilities and Stockholders equity$14,740,000