Accounting Paper 3

Q6. XYZ Ltd is a publicly listed company which has suffered from major sales declines, due to increased foreign completion, and has made a succession of losses over the past three years. During the year, its CEO resigned and was replaced by Chief Operating Officer (COO). The trial balance reveals that sales were $10,000,000 and the company made a loss of $500,000. At what level

BALANCE SHEET |Dec 1990 |Jan |Feb |Mar |Apr |May |June |July |Aug |Sept |Oct |Nov |Dec | |Cash |175 |556 |724 |175 |175 |175 |175 |175 |175 |175 |175 |175 |175 | |Accts receivable |2,628 |958 |234 |271 |270 |250 |250 |270 |1,603 |3,113 |3,580 |3,982 |3.063 | |Inventory |530 |948 |1,355 |1,749 |2,157 |2,564 |2,971 |3,365 |2,904 |2.314 |1,549 |697 |530 | |Net P/E |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 |1,070 | |Total Assets |4,403 |3,533 |3,383 |3,265 |3,672 |4,059 |4,466

In 2016, the company has 8,970,824 US Dollars in Long Term Assets (Current Assets: 7,036,578), 146,947,000 US Dollars in profits, and 6,959,225 US Dollars in Total Liabilities (Current Liabilities: 2,689,770). The problem with Labilities is that it is debt that has to be paid off over a certain period of time and in this case for current liabilities, it is a year. Labilities are expected to be paid off with cash but that’s a problem for Cabela’s. Cabela’s has a cash flow of -51,241,000 US Dollars and a long term debt value of 3,158,085 US Dollars which means cash is limited for Cabela’s. The current Ratio is at 2.616 which means the company is not managing its assets a properly and in turn could be having financial issues. [2] What is also not a good sign is the debt to equity ratio is 3.460 and this value is a sign that the Cabela’s has a high debt level and is having financial troubles. [3] Then the Return on Sales Ratio is .04 or 4% which terrible because this percent should be over 10%. Another sign that a company is having trouble is that the Acid Test Ratio is 2.30 because the ratio value should never be over 1. These troubling financial records shows that Cabela’s is having troubles but the real certain are in the direction of the

In this assignment I will be using the profit and loss accounts and balance sheet for SIGNature 's business to work out the Profitability, Liquidity and Efficiency Ratios.

Chapter 73 of title 18, United States Code, was amended by adding the following at the end: Ss1519: Destruction, alteration, or falsification of records in Federal Investigation and Bankruptcy.

BALANCE SHEET For Gunmetal Apparel, Inc. 2016 2015 2014 05/01/16 to 05/01/17 05/01/15 to 05/01/16 05/01/14 to 05/01/15 ASSETS Current Assets:  Cash $ 21,506.00 $ 20,000.00 $ 21,506.00  Petty Cash 500.00 500.00 500.00  Accounts Receivables 5,013.00 5,000.00 4013.00  Inventory 20,887.00 21,000.00 19,113.00  Prepaid Expenses 1,098.00 1,100.00 15,002.00 Total Current Assets 49,704.00 47,200.00 41,404.00 Fixed Assets:  Land 140,000.00 140,000.00 140,000.00  Buildings 60,235.00 60,235.00 60,235.00  Furniture and Equipment 28,777.00 30,777.00 22,600.00  Computer Equipment 5,195.00 5,195.00 5,195.00  Vehicles 22,513.00 22,513.00 12,255  Less: Accumulated Depreciation (40,183.00) (42,201.00) (32,018.00)

The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s

Note , Bank 247,000 Note, Stark 157,000 Accounts payable 343,000 Accrued expenses 51,000 Long-term debt, current portion 7,000 21 21 Long-term debt 43,000 50 50 Total liabilities $848,000 61 61 86 86 21 21 Projected Income Statement for Year 2011 (thousands of dollars) 2011 (P) net sales 3,600 cost of goods sold beginning inventory 418 purchases 2,736 76% 3,154 ending inventory 562 total cost of goods sold 2,592 72% gross profit 1,008 operating expenses 900 25% operating profit 108 purchase discount

3. Accounts receivable have historically been 36.5 days of sales. Since sales for 2008 are expected to be $12,000,000, accounts receivable will be

The factors looked at such as the profit margin, ROE, and ROA do paint the picture that the current state of the business is good. Revenues have increased on average 10% each year from 2002 to 2005. However during this time cash balances have decreased. Accounts receivable and inventory have increased in the same time span. Cash has decreased from $120.1 to $9.4, a decline of 92% over the four year time span. In the same period Accounts Receivable went from $90.6 in 2002 to $146.4 in 2005, an increase of 62%. Likewise, inventory has increased from $468.3 to $656.9, an increase of 40%. We do know that there are factors behind this increases and decreases, but has the change

They results show that the company had a net income of $32,184.07 during a three month period. After they took away their dividends, they had a retained earning amount of $ 29,184.07. The company had $66,814.07 in assets, $17,630.00 in liabilities, and $ 49,184.07 in equity. The company uses a ratio analysis to determine the company’s level of performance as it is the most reliable way to measure trends and to compare performance to other similar companies in the baking industry. Ration analysis also evaluates profitability, the ability to pay liabilities, to sell merchandise, stock as an investment. The company has a high current ratio of 3.78 which tells that we have adequate assets in order maintain normal operations. (Nobles,

4.3 Interpret financial statements of given firm below, using appropriate ratios for profitability, liquidity, efficiency and investment, and estimate the formulas for both internal and external comparison.

24) Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering if its current capital structure is too conservative. Lever Brothers’ present EBIT is $3 million, and profits available to common shareholders are $1,560,000, with 342,857 shares of common stock outstanding. If the firm were to instead have a debt ratio of 60%,

Net Financial Assets Net Operating Assets Net Financial Obligations Common Equity EBIT Interest Income Interest Expense Net Interest EBT Taxes Net income after taxes Common Equity + Net Financial Obligations Net Operating Assets Net Financial Assets Operating income after taxes Financial income after taxes After-tax interest expense Net income after taxes ROE RNOA RNOA* 10% 10% 40% Company 1 Company 2 4,000 5,000 5,000 3,000 2,000 9,000 2,000 (300) (300) 1,700 680 1,020 5,000 5,000 1,200 (180) 1,020 51.00% 24.00% 24.00% 2,000 400 400 2,400 960 1,440 9,000 5,000 4,000 1,200 240 1,440 16.00% 16.00% 24.00%

It is also important to note that our return on Assets (ROA) could be derived in a way of; profit margin × Assets turnover Ratio =