Q1) Reflect relationships sustained by convington pike in recent years
Profit margin on sales =5%
return on assets =7.5%
Gross profit margin =40%
inventory turnover ratio = 6times
receivables turnover ratio = 25
acid- test ratio = .9
current ratio = 2 to 1
return on shareholders\' equity = 10%
debt to equity ratio = 1/3
times interest earned ratio = 12 times
jotted in the margins are the following notes:
net income $15,000
Only one short-term not (5,000); all other current Liabilities are trade accounts
property, plant, and equipment are the only noncurrent assets
bond payable are only noncurrent liabilities
the effective interest rate on short - term notes and bonds is 8%
no investment securities
Cash balance totals $15,000
Questions:
you are requested to approximate current year's balances in form of balance sheet and income statement, to extent the information allows. Accompany those financial statement with computations you used to evaluate each amount reported.