Assets ($) 2019 2018 2017 Cash on Hand & at Banks 5936423 4037185 5960614 Accounts Receivable Net 1470879 1404974 1582153 Notes Receivable 0 0 0 Post Dated Cheques 29875 494480 400000 Short Term Investments 79029 79635 77462 Inventory 2480573 3663516 2230840 Spare Parts 296355 302883 325156 Total Current Assets 10648691 10431007 10628454 Long Term Investments 24000 24000 24000 Fixed Assets Net 1209909 1078634 1148657 Lands 151173 151173 0 Projects in Progress 5356 4378 0 Total Fixed Assets 1366438 1234185 1148657 Other Assets 0 0 0 Total Assets 12039129 11689192 11801111 Liabilities ($) 2019 2018 2017 Accounts and Notes Payable 989423 528431 423042 Credit Banks 0 88265 0 Short Term Loans 0 0 0 Accrued Part of Long Term Loans 0 0 0 Total Current Liabilities 1766230 1338167 1218900 Long Term Loans & Notes Payable 0 0 0 Corporate Bonds 0 0 0 Other Liabilities 0 0 0 Total Liabilities 1766230 1338167 1218900 Shareholders Equity ($) 2019 2018 2017 Authorized Capital 6000000 6000000 6000000 Subscribed Capital 6000000 6000000 6000000 Paid in Capital 6000000 6000000 6000000 Compulsory Reserves 1518451 1518451 1518451 Voluntary Reserve 605772 605772 605772 Other Reserves 0 0 0 Issuance Premium 0 0 0 Issuance Discount 0 0 0 Treasury Stocks 0 0 0 Cash Dividends 840000 780000 840000 Stock Dividends 0 0 0 Accumulated Change in Fair Value 0 0 0 Retained Earnings 1308676 1446802 1617988 Total Shareholders Equity 10272899 10351025 10582211 Non-controlling Interest 0 0 0 Total Liabilities & Shareholders Equity 12039129 11689192 11801111 Income Statement ($) 2019 2018 2017 Operating Revenues 12956605 12474158 13508606 Operating Expenses 10914718 10960667 11564503 Gross Profit 2041887 1513491 1944103 General and Administrative Expenses 566178 545380 523409 Selling and Distribution Expenses 295548 235531 208653 Depreciation (Period) 245686 272601 293850 Other Operating Expenses 380049 66466 41068 Net Operating Income 800112 666114 1170973 Other Revenues 137457 157011 88791 Other Expenses 0 0 0 Income Before Interest & Tax 937569 823125 1259764 Interest Expenses 0 0 0 Net Income Before Tax 937569 823125 1259764 Income Tax (Period) 190695 105334 160680 Income Tax (Previous Years) 0 0 0 Universities and Research Train Fees 0 0 0 Board of Directors Remuniration 45000 45000 45000 Net Income 701874 672791 1054084 Non-controlling Interest 0 0 0 Net Income Pertains to Shareholders 701874 672791 1054084 - Evaluate Liquidity of ABC company for 2018 and 2019 using the following ratio and give Recommendation 1.Inventory Turnover in Days = Average Inventory / (COGS/365) 2.Accounts Receivable Turnover in Days = Average Gross Receivables / (Net Sales/365) 3.Cash Ratio = (Cash Equivalent + Marketable Securities)/Current Liabilities) 4.Current Ratio = Current Assets/Current Liabilities

Assets ($) 2019 2018 2017 Cash on Hand & at Banks 5936423 4037185 5960614 Accounts Receivable Net 1470879 1404974 1582153 Notes Receivable 0 0 0 Post Dated Cheques 29875 494480 400000 Short Term Investments 79029 79635 77462 Inventory 2480573 3663516 2230840 Spare Parts 296355 302883 325156 Total Current Assets 10648691 10431007 10628454 Long Term Investments 24000 24000 24000 Fixed Assets Net 1209909 1078634 1148657 Lands 151173 151173 0 Projects in Progress 5356 4378 0 Total Fixed Assets 1366438 1234185 1148657 Other Assets 0 0 0 Total Assets 12039129 11689192 11801111 Liabilities ($) 2019 2018 2017 Accounts and Notes Payable 989423 528431 423042 Credit Banks 0 88265 0 Short Term Loans 0 0 0 Accrued Part of Long Term Loans 0 0 0 Total Current Liabilities 1766230 1338167 1218900 Long Term Loans & Notes Payable 0 0 0 Corporate Bonds 0 0 0 Other Liabilities 0 0 0 Total Liabilities 1766230 1338167 1218900 Shareholders Equity ($) 2019 2018 2017 Authorized Capital 6000000 6000000 6000000 Subscribed Capital 6000000 6000000 6000000 Paid in Capital 6000000 6000000 6000000 Compulsory Reserves 1518451 1518451 1518451 Voluntary Reserve 605772 605772 605772 Other Reserves 0 0 0 Issuance Premium 0 0 0 Issuance Discount 0 0 0 Treasury Stocks 0 0 0 Cash Dividends 840000 780000 840000 Stock Dividends 0 0 0 Accumulated Change in Fair Value 0 0 0 Retained Earnings 1308676 1446802 1617988 Total Shareholders Equity 10272899 10351025 10582211 Non-controlling Interest 0 0 0 Total Liabilities & Shareholders Equity 12039129 11689192 11801111 Income Statement ($) 2019 2018 2017 Operating Revenues 12956605 12474158 13508606 Operating Expenses 10914718 10960667 11564503 Gross Profit 2041887 1513491 1944103 General and Administrative Expenses 566178 545380 523409 Selling and Distribution Expenses 295548 235531 208653 Depreciation (Period) 245686 272601 293850 Other Operating Expenses 380049 66466 41068 Net Operating Income 800112 666114 1170973 Other Revenues 137457 157011 88791 Other Expenses 0 0 0 Income Before Interest & Tax 937569 823125 1259764 Interest Expenses 0 0 0 Net Income Before Tax 937569 823125 1259764 Income Tax (Period) 190695 105334 160680 Income Tax (Previous Years) 0 0 0 Universities and Research Train Fees 0 0 0 Board of Directors Remuniration 45000 45000 45000 Net Income 701874 672791 1054084 Non-controlling Interest 0 0 0 Net Income Pertains to Shareholders 701874 672791 1054084 - Evaluate Liquidity of ABC company for 2018 and 2019 using the following ratio and give Recommendation 1.Inventory Turnover in Days = Average Inventory / (COGS/365) 2.Accounts Receivable Turnover in Days = Average Gross Receivables / (Net Sales/365) 3.Cash Ratio = (Cash Equivalent + Marketable Securities)/Current Liabilities) 4.Current Ratio = Current Assets/Current Liabilities

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Assets ($)
	2019	2018	2017
Cash on Hand & at Banks	5936423	4037185	5960614
Accounts Receivable Net	1470879	1404974	1582153
Notes Receivable	0	0	0
Post Dated Cheques	29875	494480	400000
Short Term Investments	79029	79635	77462
Inventory	2480573	3663516	2230840
Spare Parts	296355	302883	325156
Total Current Assets	10648691	10431007	10628454
Long Term Investments	24000	24000	24000
Fixed Assets Net	1209909	1078634	1148657
Lands	151173	151173	0
Projects in Progress	5356	4378	0
Total Fixed Assets	1366438	1234185	1148657
Other Assets	0	0	0
Total Assets	12039129	11689192	11801111
Liabilities ($)
	2019	2018	2017
Accounts and Notes Payable	989423	528431	423042
Credit Banks	0	88265	0
Short Term Loans	0	0	0
Accrued Part of Long Term Loans	0	0	0
Total Current Liabilities	1766230	1338167	1218900
Long Term Loans & Notes Payable	0	0	0
Corporate Bonds	0	0	0
Other Liabilities	0	0	0
Total Liabilities	1766230	1338167	1218900
Shareholders Equity ($)
	2019	2018	2017
Authorized Capital	6000000	6000000	6000000
Subscribed Capital	6000000	6000000	6000000
Paid in Capital	6000000	6000000	6000000
Compulsory Reserves	1518451	1518451	1518451
Voluntary Reserve	605772	605772	605772
Other Reserves	0	0	0
Issuance Premium	0	0	0
Issuance Discount	0	0	0
Treasury Stocks	0	0	0
Cash Dividends	840000	780000	840000
Stock Dividends	0	0	0
Accumulated Change in Fair Value	0	0	0
Retained Earnings	1308676	1446802	1617988
Total Shareholders Equity	10272899	10351025	10582211
Non-controlling Interest	0	0	0
Total Liabilities & Shareholders Equity	12039129	11689192	11801111
Income Statement ($)
	2019	2018	2017
Operating Revenues	12956605	12474158	13508606
Operating Expenses	10914718	10960667	11564503
Gross Profit	2041887	1513491	1944103
General and Administrative Expenses	566178	545380	523409
Selling and Distribution Expenses	295548	235531	208653
Depreciation (Period)	245686	272601	293850
Other Operating Expenses	380049	66466	41068
Net Operating Income	800112	666114	1170973
Other Revenues	137457	157011	88791
Other Expenses	0	0	0
Income Before Interest & Tax	937569	823125	1259764
Interest Expenses	0	0	0
Net Income Before Tax	937569	823125	1259764
Income Tax (Period)	190695	105334	160680
Income Tax (Previous Years)	0	0	0
Universities and Research Train Fees	0	0	0
Board of Directors Remuniration	45000	45000	45000
Net Income	701874	672791	1054084
Non-controlling Interest	0	0	0
Net Income Pertains to Shareholders	701874	672791	1054084

- Evaluate Liquidity of ABC company for 2018 and 2019 using the following ratio and give Recommendation

1.Inventory Turnover in Days = Average Inventory / (COGS/365)

2.Accounts Receivable Turnover in Days = Average Gross Receivables / (Net Sales/365)

3.Cash Ratio = (Cash Equivalent + Marketable Securities)/Current Liabilities)

4.Current Ratio = Current Assets/Current Liabilities

5.Sales to Working Capital = Net Sales / Average Working Capital

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