Scribd Logo
Upload

Welcome to Scribd!

  • 26 views

    Financial Statements Analysis

    Uploaded by

    Vergel Martinez
    Here are the steps to solve this problem: a. Accounts Receivable = Sales/Receivables Turnover = 7200/8 = $900 b. Current Ratio = (Current Assets - Inventory - Cash)/Current Liabilities = 2.5 Current Assets - 300 - 2150 - 1400 = x x = 2150 + 900 + x - 1400 = 2.5 * 1400 = $350 c. Fixed Assets = Total Assets * (1 - Current Assets/Total Assets) = Sales/Asset Turnover = 7200/1.2 = $6000 Total Assets = Current Assets + Fixed Assets = 300 + 2150 + 900 +

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Financial Statements Analysis

    Uploaded by

    Vergel Martinez
    26 views9 pages
    Here are the steps to solve this problem: a. Accounts Receivable = Sales/Receivables Turnover = 7200/8 = $900 b. Current Ratio = (Current Assets - Inventory - Cash)/Current Liabilities = 2.5 Current Assets - 300 - 2150 - 1400 = x x = 2150 + 900 + x - 1400 = 2.5 * 1400 = $350 c. Fixed Assets = Total Assets * (1 - Current Assets/Total Assets) = Sales/Asset Turnover = 7200/1.2 = $6000 Total Assets = Current Assets + Fixed Assets = 300 + 2150 + 900 +

    Original Title

    Demo

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Here are the steps to solve this problem: a. Accounts Receivable = Sales/Receivables Turnover = 7200/8 = $900 b. Current Ratio = (Current Assets - Inventory - Cash)/Current Liabilities = 2.5 Current Assets - 300 - 2150 - 1400 = x x = 2150 + 900 + x - 1400 = 2.5 * 1400 = $350 c. Fixed Assets = Total Assets * (1 - Current Assets/Total Assets) = Sales/Asset Turnover = 7200/1.2 = $6000 Total Assets = Current Assets + Fixed Assets = 300 + 2150 + 900 +

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    26 views9 pages

    Financial Statements Analysis

    Uploaded by

    Vergel Martinez
    Here are the steps to solve this problem: a. Accounts Receivable = Sales/Receivables Turnover = 7200/8 = $900 b. Current Ratio = (Current Assets - Inventory - Cash)/Current Liabilities = 2.5 Current Assets - 300 - 2150 - 1400 = x x = 2150 + 900 + x - 1400 = 2.5 * 1400 = $350 c. Fixed Assets = Total Assets * (1 - Current Assets/Total Assets) = Sales/Asset Turnover = 7200/1.2 = $6000 Total Assets = Current Assets + Fixed Assets = 300 + 2150 + 900 +

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    Financial Statements Analysis

    Ratio Analysis
    Financial Statements and Financial Statements Analysis
    Defined
     Financial Statements are written records that
    presents the business activities and the financial
    performance of a company. It basically include:
    • Statement of Financial Position (Balance Sheet)
    • Statement of Comprehensive Income (Income
    Statement)
    • Statement of Cash Flows
    Financial Statements and Financial Statements Analysis
    Defined
     Financial Statement Analysis is the process of analyzing
    a company's financial statements for decision-making
    purposes. It is used as stakeholders to understand the
    overall health of an organization as well as to evaluate
    financial performance and business value.
     Ratio Analysis is a comparison in fraction, decimal or
    percentage form of two significant figures taken from
    financial statements.
    Common Balance Sheet Ratios
    • Current Ratio= Total Current Assets
    Total Current Liabilities

    • Acid Test Ratio= Total Quick Assets*


    Total Current Liabilities

    *Cash + Marketable Securities + Accounts Receivable


    Common Balance Sheet Ratios
    • Debt-to-assets Ratio= Total Liabilities
    (Debt Ratio) Total Assets

    • Working Capital Ratio= Working Capital*


    Total Assets

    *Current Assets-Current Liabilities


    Common Income Statement Ratios

    Asset Turnover Receivable Turnover

    Net sales (Net Credit Sales) Net sales (Net Credit Sales)
    Average Trade Receivables*
    Total Assets
    *(Beginning Trade Receivables+ Ending
    Trade Receivables)/2
    Common Income Statement Ratios

    Rate of Return on Assets Gross Profit Margin

    Net Profit_________ Gross Profit________


    Average Total Assets Net Sales
    For Practice
    A skeleton of Harvest Company’s balance sheet appears as follows (amounts in
    thousands):

    Cash 75 Additional
    Receivables (a) Information:
    Inventories 725 *Harvest’s current
    Prepaid Expense (b)
    ratio is 0.80 and its
    Total Current Assets (c )
    Plant Assets (d)
    acid test ratio is
    Other assets 2000 0.40
    Total Assets 6800
    Required: Complete
    Total current liabilities 1900 Harvest Company’s
    Long-term note payable (e) balance sheet.
    Other long-term liabilities 980
    Stockholder’s equity 2325
    Total Liabilities and
    Stockholder’s Equity (f)____
    For Practice
    Given are the following information for the Coleman Machine Tools Corporation.

    Sales (credit)-----------7200
    Cash-----------------------300
    Inventory ---------------2150
    Current liabilities -----1400
    Asset turnover---------1.20 times
    Current Ratio-----------2.50 times
    Debt-to-assets ratio--40%
    Receivables turnover-8 times

    *Current assets are composed of cash, marketable securities, accounts receivable, and inventory.
    Calculate the following balance sheet items:

    a. Accounts Receivable
    b. Marketable Securities
    c. Fixed Assets
    d. Long-term debt

    You might also like