Liberty University BUSI 320 Comprehensive Problem 1
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Liberty University BUSI 320 Comprehensive Problem 1
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Complete many different versions to get an A on your grade!
The below shown is just one version sample.
Use the following information to answer the questions on page 2 below:
Note: all sales are credit sales.
| Income Stmt info: | 2018 | 2019 |
| Sales | $ 1,000,000 | $ 1,050,000 |
| less Cost of Goods Sold: | 400,000 | 432,000 |
| Gross Profit | 600,000 | 618,000 |
| Operating Expenses | 350,000 | 365,750 |
| Earnings before Interest & Taxes | 250,000 | 252,250 |
| Interest exp | 20,000 | 20,400 |
| earnings before Taxes | 230,000 | 231,850 |
| Taxes | 69,000 | 69,555 |
| Net Income | $ 161,000 | $ 162,295 |
| Balance Sheet info: | 12/31/2018 | 12/31/2019 |
| Cash | 25,000 | $ 30,000 |
| Accounts Receivable | 50,000 | $ 54,000 |
| Inventory | 125,000 | $ 130,000 |
| Total Current Assets | $ 200,000 | $ 214,000 |
| Fixed Assets (Net) | $ 300,000 | $ 318,000 |
| Total Assets | $ 500,000 | $ 532,000 |
| Current Liabilities | $ 110,000 | $ 119,900 |
| Long Term Liabilities | $ 180,000 | $ 175,000 |
| Total Liabilities | $ 290,000 | $ 294,900 |
| Stockholder’s Equity | $ 210,000 | $ 237,100 |
| Total Liab & Equity: | $ 500,000 | $ 532,000 |
Compute each of the following ratios for 2018 and 2019 and
indicate whether each ratio was getting “better” or “worse” from 2018 to 2019
and was “good” or “bad” compared to the Industry Avg in 2019
(round all numbers to 2 digits past the decimal place)
| 2018 | 2019 | Getting Better or Getting Worse? | 2019 Industry Avg | “Good” or “Bad” compared to Industry Avg | |
| Profit Margin | 0.11 | ||||
| Current Ratio | 1.90 | ||||
| 9uick Ratio | 0.66 | ||||
| Return on Assets | .28 | ||||
| Debt to Assets | .50 | ||||
| Receivables turnover | 18.00 | ||||
| Avg. collection period* | 15.50 | ||||
| Inventory Turnover** | 9.25 | ||||
| Return on Equity | 0.55 | ||||
| Times Interest Earned | 13.20 |
Assume a 360 day year
Inventory Turnover can be computed 2 different ways. Use the formula listed in the text
Liberty University BUSI 320 Comprehensive Problem 1
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