The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses.Jimenez Corporation: Forecasted Balance Sheet as of December 31, 2020 Assets Cash 72,000 Accounts receivable 439,000 Inventories 894,000 Total current assets 1,405,000 Fixed assets 431,000 Total assets 1,836,000 Liabilities and Equity Accounts payable 332000 Notes payable 100,000 Accruals 170,000 Total current liabilities 602,000 Long-term debt 404,290 Common stock 575,000 Retained earnings 254,710 Total liabilities and equity 1,836,000 Jimenez Corporation: Forecasted Income Statement for 2020 Sales 4,290,000 Cost of goods sold 3,580,000 Selling, general, and admin expenses 525,456 Earnings before taxes (EBT) 184,544 Interest expense 40,000 Earnings before taxes (EBT) 144,544 Taxes (25%) 36,136 Net Income 108,408 Jimenez Corporation: Per Share Data for 2020 EPS 4.71 Cash dividends per share 0.95 P/E ratio 5.0 Market price (average) 23.57 Number of shares outstanding 23,000 RATIO JIMENEZ INDUSTRY AVGa Quick Ratio 1.0 Current Ratio 2.7 Inventory Turnoverb 7.0 Days sales outstandingc 32.0 days Fixed assets turnoverb 13.0 Total assets turnoverb 2.6 Return on assets 9.1% Return on equity 18.2% Profit margin on sales 3.5% Debt-to-assets ratio 21.0% Liabilities-to-assets ratio 50.0% P/E ratio 6.0 Market/Book ratio 3.5 Notes: a Industry average ratios have been stable for the past 4 years b Based on year-end balance sheet figures c Calculation is based on a 365-day year

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter3: Analysis Of Financial Statements

Section: Chapter Questions

Problem 14P: The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry...

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The Jimenez Corporation’s forecasted 2020 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2020 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses.
Jimenez Corporation:

Forecasted Balance Sheet as of December 31, 2020

Assets
Cash	72,000
Accounts receivable	439,000
Inventories	894,000
Total current assets	1,405,000
Fixed assets	431,000
Total assets	1,836,000
Liabilities and Equity
Accounts payable	332000
Notes payable	100,000
Accruals	170,000
Total current liabilities	602,000
Long-term debt	404,290
Common stock	575,000
Retained earnings	254,710
Total liabilities and equity	1,836,000

Jimenez Corporation: Forecasted Income Statement for 2020

Sales	4,290,000
Cost of goods sold	3,580,000
Selling, general, and admin expenses	525,456
Earnings before taxes (EBT)	184,544
Interest expense	40,000
Earnings before taxes (EBT)	144,544
Taxes (25%)	36,136
Net Income	108,408

Jimenez Corporation: Per Share Data for 2020

EPS	4.71
Cash dividends per share	0.95
P/E ratio	5.0
Market price (average)	23.57
Number of shares outstanding	23,000

RATIO	JIMENEZ	INDUSTRY AVG^a
Quick Ratio		1.0
Current Ratio		2.7
Inventory Turnover^b		7.0
Days sales outstanding^c		32.0 days
Fixed assets turnover^b		13.0
Total assets turnover^b		2.6
Return on assets		9.1%
Return on equity		18.2%
Profit margin on sales		3.5%
Debt-to-assets ratio		21.0%
Liabilities-to-assets ratio		50.0%
P/E ratio		6.0
Market/Book ratio		3.5

Notes:

^a Industry average ratios have been stable for the past 4 years

^b Based on year-end balance sheet figures

^c Calculation is based on a 365-day year

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