Assessment file to create a spreadsheet to calculate the below financial ratios. Complete a comparison between the two years for this company and remember to use Excel formulas and link cells when possible. Be sure to explain how the ratios compare (expand beyond just stating which one is larger) and why.
Acid-test (quick) ratio
Current ratio
Accounts receivable turnover
Inventory turnover
Gross profit ratio
Net income to sales
Rate earned on total assets
Rate earned on common stock equity
Debt to total assets
Times interest earned
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THE PRINTER COMPANY
Comparative Income Statement
For the Years Ended December 31, 2010 and 2009
|
|
Revenue:
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2010
|
2009
|
|
Sales
|
895,000
|
705,450
|
|
Less Sales Returns and Allowances
|
12,500
|
11,650
|
|
Net Sales
|
882,500
|
693,800
|
|
Cost of Goods Sold
|
|
|
|
Merchandise Inventory, January 1
|
82,500
|
80,000
|
|
Net Purchases
|
306,000
|
262,000
|
|
Total Merchandise Available for Sale
|
388,500
|
342,000
|
|
Less Merchandise Inventory, December 31
|
85,000
|
82,500
|
|
Cost of Goods Sold
|
303,500
|
259,500
|
|
Gross Profit on Sales
|
579,000
|
434,300
|
|
Operating Expenses
|
|
|
|
Selling Expenses
|
|
|
|
Sales Salaries Expense
|
87,000
|
79,000
|
|
Payroll Tax Expense-Selling
|
8,700
|
7,900
|
|
Other Selling Expenses
|
25,800
|
15,200
|
|
Total Selling Expenses
|
121,500
|
102,100
|
|
General and Administrative Expenses
|
|
|
|
Officers Salaries Expense
|
130,000
|
110,000
|
|
Payroll Tax Expense-Administrative
|
13,000
|
11,000
|
|
Depreciation Expense
|
8,250
|
8,250
|
|
Other General and Administrative Expenses
|
9,450
|
7,000
|
|
Total General and Administrative Expenses
|
160,700
|
136,250
|
|
Total Operating Expenses
|
282,200
|
238,350
|
|
Net Income Before Income Taxes
|
296,800
|
195,950
|
|
Income Tax Expense
|
89,040
|
58,785
|
|
Net Income After Income Taxes
|
207,760
|
137,165
|
|
THE PRINTER COMPANY
Comparative Balance Sheet
December 31, 2010 and 2009
|
|
Assets
|
2010
|
2009
|
|
Current Assets
|
|
|
|
Cash
|
88,375
|
47,256
|
|
Accounts Receivable
|
60,000
|
37,500
|
|
Merchandise Inventory
|
85,000
|
82,500
|
|
Prepaid Expenses
|
9,500
|
5,000
|
|
Supplies
|
1,000
|
434
|
|
Total Current Assets
|
243,875
|
172,690
|
|
Property, Plant, and Equipment
|
|
|
|
Land
|
75,000
|
75,000
|
|
Building and Equipment
|
82,500
|
82,500
|
|
Less Accumulated Depreciation
|
(33,000)
|
(24,750)
|
|
Net Book Value-Building and Equipment
|
49,500
|
57,750
|
|
Total Property, Plant, and Equipment
|
124,500
|
132,750
|
|
Total Assets
|
368,375
|
305,440
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Current Liabilities
|
|
|
|
Accounts Payable
|
22,600
|
55,542
|
|
Sales Tax Payable
|
1,000
|
3,000
|
|
Payroll Taxes Payable
|
1,142
|
1,025
|
|
Income Taxes Payable
|
1,000
|
5,000
|
|
Total Current Liabilities
|
25,742
|
64,567
|
|
Long-Term Liabilities
|
|
|
|
Mortgage Payable
|
39,000
|
45,000
|
|
Total Long-Term Liabilities
|
39,000
|
45,000
|
|
Total Liabilities
|
64,742
|
109,567
|
|
Stockholders' Equity
|
|
|
|
Common Stock ($1 par, 10,000 shares authorized 10,000 shares issued and outstanding)
|
10,000
|
10,000
|
|
Paid-in-Capital - Common Stock
|
10,000
|
10,000
|
|
Retained Earnings
|
283,633
|
175,873
|
|
Total Stockholders' Equity
|
303,633
|
195,873
|
|
Total Liabilities and Stockholders' Equity
|
368,375
|
305,440
|
.