Assignment:
Compute each of the following ratios for 2013 and 2014 and indicate whether each ratio was getting "better" or "worse" from 2013 to 2014 and was "good" or "bad" compared to the Industry Avg in 2014 (round all numbers to 2 digits past the decimal place)
Type your answers in the table and submit this worksheet.
- Assume a 360 day year
- Inventory Turnover can be computed 2 different ways. Use the formula listed in the text
- (the one the text indicates many credit reporting agencies generally use)
Use the following information to answer the questions above:
note: all sales are credit sales
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Income Statement info:
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2013
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2014
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Sales
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$ 1,050,000
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$ 1,128,750
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less Cost of Goods Sold:
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325,000
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346,125
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Gross Profit
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725,000
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782,625
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Operating Expenses
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575,000
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609,500
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Earnings before Interest & Taxes
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150,000
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173,125
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Interest exp
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25,000
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29,000
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earnings before Taxes
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125,000
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144,125
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Taxes
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50,000
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57,650
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Net Income
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$ 75,000
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$ 86,475
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BALANCE SHEET
NEXT PAGE
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Balance Sheet info:
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12/31/2013
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12/31/2014
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Cash
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60,000
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$ 66,000
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Accounts Receivable
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80,000
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$ 83,200
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Inventory
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110,000
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$ 119,900
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Total Current Assets
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$ 250,000
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$ 269,100
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Fixed Assets (Net)
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$ 300,000
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$ 318,000
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Total Assets
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$ 550,000
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$ 587,100
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Current Liabilities
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$ 130,000
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$ 136,500
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Long Term Liabilities
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$ 150,000
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$ 170,000
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Total Liabilities
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$ 280,000
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$ 306,500
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Stockholder's Equity
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$ 270,000
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$ 280,600
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Total Liab& Equity:
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$ 550,000
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$ 587,100
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