Total asset turnover 2.3 times Average collection period( assume a 365 day year)
ID: 2423876 • Letter: T
Question
Total asset turnover 2.3 times
Average collection period( assume a 365 day year) 8.7 days
Fixed assets turnover 5.1 times
Inventory turnover ( based on cost of goods sold ) 3.4
Current ratio 1.7
sales ( all on credit ) $ 4.23 million
cost of goods sold 80%
Debt ratio 55%
Use the following industry average ratios to construct a pro forma balance sheet for Carlos Menza, Inc.
The company cost of goods sold is $..... ( round to the nearest dollar )
The company total assets are $.....( round to the nearest dollar )
The company fixed assets are $ ....( round to the nearest dollar )
The company accounts receivables is $ .....( round to the nearest dollar )
The company inventories are $.......( round to the nearest dollar )
The company current liabilities are $ .....( round to the nearest dollar )
The company's total liabilities are $ .....( round to the nearest dollar )
complete Carlos Menza balance sheet below ......( round to the nearest dollar )
Carlos Menza
Pro Forma Balance Sheet Cash $ ..... Current liabilities $ ....
Account receivable .......... Long-term debt ......
Inventory ........ Total liabilities $ ......
Net fixed assets........ Common equity .....
Total $....... Total $ .........
Explanation / Answer
Statement showing computations Particulars Amount Sales 4,230,000.00 Costof Goods sold @80% = 4230,000*80% 3,384,000.00 Total Assets= Sales / Asset Turnover = 4230,000/2.3 1,839,130.43 Fixed assets = Sales / Fixed Asset Turnover = 4230,000/5.1 829,411.76 Average Collection Period in days 8.70 AR Turnover Ratio = 365/8.70 41.95 Accounts receivabe = 4230,000/41.95 100,824.66 Inventory Turnover 3.40 Inventory = COGS/ ITR = 3384,000/3.4 995,294.12 Current Assets = Total Assets - Fixed Assets 1,009,718.67 Current Liab = CA/ Current ratio = 593,952.16 Total Liab = Total Assets *Debt Ratio = 1839130.43 *55% 1,011,521.74 Common Equity =Total Assets - Liab 827,608.70 Cash = 1839130.43- All other assets (86,400.11) Accounts Receivable 100,824.66 Current liab 593,952.16 Inventory 995,294.12 Long term debt = Total - CL 417,569.58 Net Fixed Assets 829,411.76 Common Equity 827,608.70 1,839,130.43 1,839,130.43