Sheet1
Wilmington – 305 – Test 1 (b) – Ratios
Name
1)
Construct the Current Assets section of the Balance Sheet from the following:
Sales (Credit)

Inventory Turnover
Current Liabilities
Average Collection Period
2)
Given the following information & ratios , assemble a Balance Sheet
Sales ( all on credit )
Cost of Goods Sold
Stockholders Equity
DSO

Debt/Equity
Assets
Liabilities & Stockholders Equity
Cash
Total Current Liabilities
A/R
Long term Liabilities
Inventory
Total Current Assets
Total Liabilities
Net Plant & Equipment
Total Stockholders Equity
Total Assets
Total Debt & Stockholders Equity
3)
Construct the following Balance Sheet from the following:
Sales
Current Ratio
Liabilities
Current Debt
Long Term Debt
Inv
Total Debt
Total Current
Fixed Assets
Net Worth
4)
Given the following information , please answer the following for the ’02 & ’03 years.
As a given , assume the company extends 15 day terms on receivables
and the industry median for Profit margin is 2% ; for current ratio is 1.5x
Use ratios to support your answers
(a) If one of the bank covenants requires a maximum Debt/Equity ratio of 2x; were they in
compliance for the ’03 year. If so how much more could they borrow.
(b) Comment on the company’s performance relative to their collection of receivables
Š Did the company meet their stated goal of a return to shareholders of 20%
d) What would the profit in ’02 have been in the budget called for a profit margin of 4.5%
e) Comment on the Company’s Liquidity position
ABC Company
Income Statement
For the years ended December 31 , 2002 & December 31,2003
COGS
Gross Profit
S & G Exp
Depreciation
EBIT
Interest
EBT
Gain /Loss on sale of Assets
Taxes
EAT
Dividends
Balance Sheet
Current Assets:
A/P
Accrued Expenses
Common Stock
Capital in excess of Par
Retained Earnings
Total Stockholders Equity
Total Liabilties & Stockholders Equity
Gross Profit ( 10% of Sales…