70.2K

Verified Solution

Link Copied!

Instructions:

You will want to calculate Working Capital, Current Ratio, Quick Ratio, Inventory Turnover, Number of Days Sales in Ending Inventory, A/R Turnover, Number of Days Sales Uncollected, ROA/ROI, ROE, Debt Ratio, Equity Ratio and Debt-to-Equity Ratio. All answers should be computed to the nearest tenth.

Slayer Inc. Year 2 Income Statement:	Required:
	Sales	$ 1,250,000		i) Compute Current Ratio & Quick Ratio
	COGS	715,000		ii) Compute the four Efficiency Ratios
	Gross Margin	535,000		iii) Compute the five Profiotabilty Ratios
	Op. Expenses	305,000		iv) Compute the three Solvency Ratios
	Op. Income	230,000
	Loss on Disposal	15,000
	Income Before Taxes	215,000
	Taxes	65,000
	Net Income	$ 150,000
Comparative Balance Sheets:
Assets	Year 2		Year 1
	Cash	40,000		25,000
	A/R	205,000		215,000
	Inventory	225,000		180,000
	Prepaids	25,000		15,000
	Total Current Assets	495,000		435,000
	Long Term Investments	25,000		15,000
	Property, Plant & Equipment	435,000		350,000
	Accum. Depreciation	(120,000)		(80,000)
	Net Property, Plant & Equipment	315,000		270,000
	Total Assets	$ 835,000		$ 720,000
Liabilities
	A/P	145,000		175,000
	Unearned Revenue	20,000		45,000
	Total Current Liabilities	165,000		220,000
	Long Term Note Payable	140,000		145,000
	Total Liabilities	305,000		365,000
Equity
	Common Stock	370,000		260,000
	Retained Earnings	160,000		95,000
	Total Owners' Equity	530,000		355,000
	Total Liabilities & Equity	$ 835,000		$ 720,000

Answer & Explanation Solved by verified expert

See Answer