Green House, LLP's balance sheet at the end of its most recent fiscal year, shows the following information: Assets Liabilities and Stockholders’ Equity Cash and marketable securities $ 23,015 Accounts payable $ 163,257 Accounts receivable 141,258 Notes payable 21,115 Inventories 212,444 Total current assets $ 376,717 Total current liabilities $ 184,372 Long-term debt 168,022 Total liabilities $ 352,394 Net plant and equipment 711,256 Common stock 313,299 Goodwill and other assets 89,879 Retained earnings 512,159 Total assets $1,177,852 Total liabilities and stockholders’ equity $1,177,582 In addition, the company reported the following: Net income = $156,042 Sales = $4,063,589 COGS = $2,641,333 Determine the following values for the company: Cash ratio _____________ Inventory turnover ratio _____________ Fixed asset turnover ratio _____________ Total debt ratio _____________ Debt-to-Equity ratio _____________
- Green House, LLP's balance sheet at the end of its most recent fiscal year, shows the following information:
Assets |
|
|
Liabilities and |
|
Cash and marketable securities |
$ 23,015 |
|
Accounts payable |
$ 163,257 |
Accounts receivable |
141,258 |
|
Notes payable |
21,115 |
Inventories |
212,444 |
|
|
|
Total current assets |
$ 376,717 |
|
Total current liabilities |
$ 184,372 |
|
|
|
Long-term debt |
168,022 |
|
|
|
Total liabilities |
$ 352,394 |
Net plant and equipment |
711,256 |
|
Common stock |
313,299 |
|
89,879 |
|
Retained earnings |
512,159 |
Total assets |
$1,177,852 |
|
Total liabilities and stockholders’ equity |
$1,177,582 |
|
|
|
|
|
In addition, the company reported the following:
- Net income = $156,042
- Sales = $4,063,589
- COGS = $2,641,333
Determine the following values for the company:
- Cash ratio _____________
- Inventory turnover ratio _____________
- Fixed asset turnover ratio _____________
- Total debt ratio _____________
- Debt-to-Equity ratio _____________
- The following financial statements belong to the International Carrier Services company, for the closing of its fiscal year, as of July 31, 2019.
International Carrier Services Income Statement for the Fiscal Year Ended July 31, 2019 |
|
Net sales |
$51,407 |
Cost of products sold |
25,076 |
Gross margin |
$26,331 |
|
15,746 |
Depreciation |
758 |
Operating income (loss) |
$ 9,827 |
Interest expense |
477 |
Earnings (loss) before income taxes |
9,350 |
Income taxes |
2,869 |
Net income (loss) |
$ 6,481 |
International Carrier Services Balance Sheet as of 7/31/2019
|
||||
Assets |
|
|
Liabilities and Stockholders’ Equity |
|
Cash and marketable securities |
$ 5,469 |
|
Accounts payable |
$ 3,617 |
Investment securities |
423 |
|
Accrued and other liabilities |
7,689 |
Accounts receivable |
4,062 |
|
Taxes payable |
2,554 |
Total inventories |
4,400 |
|
Debt due within one year |
8,287 |
Prepaid expenses & other receivables |
2,761 |
|
Total current liabilities |
$22,147 |
Other non-current assets |
1,925 |
|
|
|
Total current assets |
$19,040 |
|
Long-term debt |
12,554 |
|
|
|
|
2,261 |
Property, plant, and equip., at cost |
25,304 |
|
Other non-current liabilities |
2,808 |
Less: Accumulated depreciation |
11,196 |
|
Total liabilities |
$39,770 |
Net plant and equipment |
14,108 |
|
|
|
Net goodwill & other intangible assets |
23,900 |
|
Convertible Class A |
1,526 |
Total Fixed Assets |
38,008 |
|
Common stock |
2,141 |
|
|
|
Retained earnings |
13,611 |
|
|
|
Total stockholders’ equity (deficit) |
$17,278 |
Total Assets |
$57,048 |
|
Total Liabilities and Stockholders’ Equity |
$57,048 |
|
|
|
|
|
- Calculate the financial ratios for the International Carrier Services company and compare them to the financial ratios provided for the trucking industry to which the evaluated company belongs.
Ratio |
International Carrier Services |
Industry Average |
Current ratio |
…. |
2.05 |
Quick ratio |
…. |
0.78 |
Gross margin |
…. |
23.9% |
Profit margin |
…. |
12.3% |
Debt ratio |
…. |
0.23 |
Long-term debt to equity |
…. |
0.98 |
Time interest-earned ratio |
…. |
5.62 |
|
…. |
5.3% |
|
…. |
18.8% |
- Based on the results of the previous year and your evaluation, propose the adjustments or strategies that you understand the company must carry out in order to be in a better financial position.
- Would you invest in stocks or bonds of this company? Explain.
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