Green House, LLP's balance sheet at the end of its most recent fiscal year, shows the following information: Assets Liabilities and Stockholders’ Equity Cash and marketable securities $ 23,015 Accounts payable $ 163,257 Accounts receivable 141,258 Notes payable 21,115 Inventories 212,444 Total current assets $ 376,717 Total current liabilities $ 184,372 Long-term debt 168,022 Total liabilities $ 352,394 Net plant and equipment 711,256 Common stock 313,299 Goodwill and other assets 89,879 Retained earnings 512,159 Total assets $1,177,852 Total liabilities and stockholders’ equity $1,177,582 In addition, the company reported the following: Net income = $156,042 Sales = $4,063,589 COGS = $2,641,333 Determine the following values for the company: Cash ratio _____________ Inventory turnover ratio _____________ Fixed asset turnover ratio _____________ Total debt ratio _____________ Debt-to-Equity ratio _____________
- Green House, LLP's balance sheet at the end of its most recent fiscal year, shows the following information:
|
Assets |
|
|
Liabilities and |
|
|
Cash and marketable securities |
$ 23,015 |
|
Accounts payable |
$ 163,257 |
|
Accounts receivable |
141,258 |
|
Notes payable |
21,115 |
|
Inventories |
212,444 |
|
|
|
|
Total current assets |
$ 376,717 |
|
Total current liabilities |
$ 184,372 |
|
|
|
|
Long-term debt |
168,022 |
|
|
|
|
Total liabilities |
$ 352,394 |
|
Net plant and equipment |
711,256 |
|
Common stock |
313,299 |
|
|
89,879 |
|
|
512,159 |
|
Total assets |
$1,177,852 |
|
Total liabilities and stockholders’ equity |
$1,177,582 |
|
|
|
|
|
|
In addition, the company reported the following:
- Net income = $156,042
- Sales = $4,063,589
- COGS = $2,641,333
Determine the following values for the company:
- Cash ratio _____________
- Inventory turnover ratio _____________
- Fixed asset turnover ratio _____________
- Total debt ratio _____________
- Debt-to-Equity ratio _____________
- The following financial statements belong to the International Carrier Services company, for the closing of its fiscal year, as of July 31, 2019.
|
International Carrier Services Income Statement for the Fiscal Year Ended July 31, 2019 |
|
|
Net sales |
$51,407 |
|
Cost of products sold |
25,076 |
|
Gross margin |
$26,331 |
|
|
15,746 |
|
|
758 |
|
Operating income (loss) |
$ 9,827 |
|
Interest expense |
477 |
|
Earnings (loss) before income taxes |
9,350 |
|
Income taxes |
2,869 |
|
Net income (loss) |
$ 6,481 |
|
International Carrier Services Balance Sheet as of 7/31/2019
|
||||
|
Assets |
|
|
Liabilities and Stockholders’ Equity |
|
|
Cash and marketable securities |
$ 5,469 |
|
Accounts payable |
$ 3,617 |
|
Investment securities |
423 |
|
Accrued and other liabilities |
7,689 |
|
Accounts receivable |
4,062 |
|
Taxes payable |
2,554 |
|
Total inventories |
4,400 |
|
Debt due within one year |
8,287 |
|
Prepaid expenses & other receivables |
2,761 |
|
Total current liabilities |
$22,147 |
|
Other non-current assets |
1,925 |
|
|
|
|
Total current assets |
$19,040 |
|
Long-term debt |
12,554 |
|
|
|
|
|
2,261 |
|
Property, plant, and equip., at cost |
25,304 |
|
Other non-current liabilities |
2,808 |
|
Less: Accumulated depreciation |
11,196 |
|
Total liabilities |
$39,770 |
|
Net plant and equipment |
14,108 |
|
|
|
|
Net goodwill & other intangible assets |
23,900 |
|
Convertible Class A |
1,526 |
|
Total Fixed Assets |
38,008 |
|
Common stock |
2,141 |
|
|
|
|
Retained earnings |
13,611 |
|
|
|
|
Total stockholders’ equity (deficit) |
$17,278 |
|
Total Assets |
$57,048 |
|
Total Liabilities and Stockholders’ Equity |
$57,048 |
|
|
|
|
|
|
- Calculate the financial ratios for the International Carrier Services company and compare them to the financial ratios provided for the trucking industry to which the evaluated company belongs.
|
Ratio |
International Carrier Services |
Industry Average |
|
Current ratio |
…. |
2.05 |
|
Quick ratio |
…. |
0.78 |
|
Gross margin |
…. |
23.9% |
|
Profit margin |
…. |
12.3% |
|
Debt ratio |
…. |
0.23 |
|
Long-term debt to equity |
…. |
0.98 |
|
Time interest-earned ratio |
…. |
5.62 |
|
ROA |
…. |
5.3% |
|
|
…. |
18.8% |
- Based on the results of the previous year and your evaluation, propose the adjustments or strategies that you understand the company must carry out in order to be in a better financial position.
- Would you invest in stocks or bonds of this company? Explain.
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