Income Statement FY 2007 Sales 1,750,000 Labor and Materials 1,150,000 Factory O
ID: 2650196 • Letter: I
Question
Income Statement
FY 2007
Sales 1,750,000
Labor and Materials 1,150,000
Factory Overhead 370,000
Selling and General Expenses 260,000
Profit Before Taxes (30,000)
Taxes 0
Profit (30,000)
Balance Sheet
Dec 2007
Assets
Cash 25,000
Accounts Receivables 350,000
Inventories 90,000
Plant and Equipment 190,000
Total Assets 655,000
Liabilities
Account Payable 255,000
Notes Payable 90,000
Long-term Debt 10,000
Stockholders
Explanation / Answer
Quick Ratio
Quick Ratio = Quick Asset/Current Liabilty
Quick Ratio = (Cash + Accounts Receivables)/ ( Account Payable + Notes Payable)
Quick Ratio = (25000 + 350000)/(255000 + 90000)
Quick Ratio = 1.09
Current Ratio
Current Ratio =Current Asset/Current Liabilty
Current Ratio = (Cash + Accounts Receivables+ Inventories)/ ( Account Payable + Notes Payable)
Current Ratio = (25000 + 350000+ 90000)/(255000 + 90000)
Current Ratio = 1.35
Total Debt to Net Worth and
Total Debt to Net Worth = Total Debt/Net worth
Total Debt to Net Worth = (Account Payable + Notes Payable + Long-term Debt)/(Capital Stock + Retained Earnings)
Total Debt to Net Worth = (255000 + 90000 + 10000)/(25000 + 275000)
Total Debt to Net Worth = 1.18
Current Debt to Net Worth.
Current Debt to Net Worth = Current Debt/Net worth
Current Debt to Net Worth = (Account Payable + Notes Payable)/(Capital Stock + Retained Earnings)
Current Debt to Net Worth = (255000 + 90000 )/(25000 + 275000)
Current Debt to Net Worth = 1.15