Evaluate Liquidity of ABC company for 2018 and 2019 using the following ratio and give Recommendation 1.Sales to Working Capital = Net Sales / Average Working Capital
Evaluate Liquidity of ABC company for 2018 and 2019 using the following ratio and give Recommendation 1.Sales to Working Capital = Net Sales / Average Working Capital
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
Related questions
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 ($) | |||
2019 | 2018 | 2017 | |
Authorized Capital | 6000000 | 6000000 | 6000000 |
Subscribed Capital | 6000000 | 6000000 | 6000000 |
Paid in Capital | 6000000 | 6000000 | 6000000 |
Compulsory Reserves | 1518451 | 1518451 | 1518451 |
Voluntary Reserve | 605772 | 605772 | 605772 |
Other Reserves | 0 | 0 | 0 |
Issuance Premium | 0 | 0 | 0 |
Issuance Discount | 0 | 0 | 0 |
0 | 0 | 0 | |
Cash Dividends | 840000 | 780000 | 840000 |
Stock Dividends | 0 | 0 | 0 |
Accumulated Change in Fair Value | 0 | 0 | 0 |
Retained Earnings | 1308676 | 1446802 | 1617988 |
Total Shareholders Equity | 10272899 | 10351025 | 10582211 |
Non-controlling Interest | 0 | 0 | 0 |
Total Liabilities & Shareholders Equity | 12039129 | 11689192 | 11801111 |
Income Statement ($) | |||
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.Sales to Working Capital = Net Sales / Average Working Capital
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education