Missoula Inc. reported the following selected financial statement data: What is

Question

Missoula Inc. reported the following selected financial statement data:

What is Missoula's current ratio for the current year?

3 points   

3 points   

Compute Missoula%u2019s inventory turnover ratio for the current year.

3 points   

3 points   

3 points   

3 points   

Compute the present value of the following single amounts to be received at the end of the specified period at the given interest rate:

      Previous       Current       Year          Year Cash 30,000 32,000 Accounts receivable (net) 48,000 52,000 Inventory 68,000 72,000 Plant (net) 210,000 218,000 Total assets 405,000 395,000 Accounts payable 45,000 50,000 Long term liabilities 100,000 95,000 Shareholder's equity 260,000 250,000 Net sales 340,000 400,000 Cost of goods sold 220,000 280,000 Net income 20,000 25,000

Explanation / Answer

Hi,

Please find the answer as follows:

Current Ratio = 156000/50000 = 3.12

Accounts Receivables Turnover Ratio = 400000/(48000 + 52000)/2 = 8 times

Inventory Turnover Ratio = 280000/(62000 + 78000)/2 = 4 times

Profit Margin on Sales = 25000/400000*100 = 6.25%

Return on Assets = 25000/395000*100 = 6.33%

Return on Shareholder's Equity = 25000/250000*100 = 10%

Part B:

Present Value:

a =40000/(1+0.07)^20 = 10337

b =20000/(1+0.06)^25 = 4660

c ==50000/(1+0.11)^10 = 17609

Option A is correct.

Thanks.

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