The income statement and balance sheet below determine the

Question

Question

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

a Market capitalization
b Current ratio
c Quick Ratio
d Debt Ratio
e Earnings per share (EPS)
f Price Earnings Ratio (PE)
g Profit Margin
h Briefly, within the space provided below, discuss implications of the above answers.

 

Income Statement		Year x			Balance Sheet		Year x
Revenue		$15,000,000		Assets
	Returns, Credits, etc.	($5,000)			Current Assets
	Net Sales (Revenue)	$14,995,000				Cash	$80,000
Direct Costs						Accounts 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)		$4,745,000		Liabilities
	Interest Expense/Income	($162,300)			Current Liabilities
	Pre-tax Income	$4,582,700				Notes Payable	$100,000
	Income Tax @ 30%	($1,374,810)				Accounts Payable	$125,000
	Net Income	$3,207,890				Taxes Payable	$10,000
					Total Current Liabilities		$235,000
					Long Term Liabilities
						Bank Loans @ 6%	$455,000
	Current Stock Price	$28.00				Mortgage @ 4.5%	$3,000,000
	Current Outstanding Shares	600,000			Total Long Term Liabilities		$3,455,000
					Capital	Stock	$9,900,000
						Retained Earnings	$1,150,000
					Stockholders Equity		$11,050,000
				Total Liabilities and Stockholders equity			$14,740,000