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Balance Sheet
						Year ending		Year ending
						12/31/2005		12/31/2006
Assets						($ in thousands of dollars)
	Current Assets
		Cash				$ 2,081		$ 2,540
		Marketable Securities				1,625		1,800
		Accounts Receivable				16,850		18,320
		Inventories				26,470		27,530
			Total Current Assets			47,026		50,190
	Long-Term Assets
		Property & Equipment at cost				39,500		43,100
		Less Accumulated Depreciation				9,500		11,400
		Net Property & Equipment				30,000		31,700
			Total Long-Term Assets			30,000		31,700
			TOTAL ASSETS			$ 77,026		$ 81,890
Liabilities
	Current Liabilities
		Accounts Payable				$ 8,340		$ 9,721
		Notes Payable @ 10%				5,635		8,500
		Taxes Payable				3,150		3,200
		Other Current Liabilities				1,750		2,102
		Current Portion of Longterm Debt				2,000		2,000
			Total Current Liabilities			20,875		25,523
	Long-Term Liabilities
		Mortgage Bonds @ 9.58%				24,000		22,000
			Total Long-Term Liabilities			24,000		22,000
			TOTAL LIABILITIES			$ 44,875		$ 47,523
Equity
	Common Stock					$ 13,000		$ 13,000
	Paid in Capital in excess of par value					10,000		10,000
	Retained Earnings					9,151		11,367
			TOTAL EQUITY			$ 32,151		$ 34,367
				Income Statement
								Year ending
								12/31/2006
Revenues							($ in thousands of dollars)
	Gross Sales Revenues							$ 116,900
	Allowance for Sales Returned							4,140
	Net Sales Revenues							112,760
			TOTAL SALES					112,760
Expenses
	Cost of Goods Sold							85,300
			Gross Profits					27,460
	Operating Expenses:
		Selling & Marketing						6,540
		General Administrative						9,400
			Total Operating Expenses					15,940
			Operating Income					11,520
	Interest Expenses:
		Interest on Loans						850
		Interest on Mortgage Bonds						2,310
			Total Interest Expenses					3,160
			Earnings Before Taxes					8,360
	Federal & State Taxes @ 40%							3,344
			NET INCOME					5,016

Requirements :

From the Balance sheet and income statement provided above.

a. Calculate 5 ratios ?

b. Interpret your answers in section a ?

Answer & Explanation Solved by verified expert

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