ICE3_513_08 - AGEC513--Spring 2008 Dr. Hikaru Peterson...

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Unformatted text preview: AGEC513--Spring 2008 Dr. Hikaru Peterson INCLASS EXERCISE 3 Due 8:30am, April 4 (Friday) Total 15 points Name______________________ 1. (9 points) Compute the missing values (a) through (h) based on the information provided below. Show all your calculations. Balance Sheet E&S Enterprises December 31, 2007 $4,500 Accounts Payable $19,600 (a) (b) (c) (d) Notes Payable Accruals Total Current Liabilities Long Term Debt Total Liabilities Equity (e) (f) (g) (h) (d) 1,000 Cash Accounts Receivable Inventory Total Current Assets Net Fixed Assets Total Assets Information: $10,000 Sales totaled $110,000. The gross profit margin was 25 percent. Inventory turnover was 3.0. The current ratio was 2.40. The total asset turnover was 1.13. The debt ratio was 53.8 percent. 2 2. (6 points) The following table summarizes average financial ratios for the KFMA (Kansas Farm Management Association) from 2004 to 2006. Briefly comment on what you can infer from each ratio regarding the changes in financial health of the KFMA farms in recent years (1 point each). 2004 CURRENT RATIO DEBT TO ASSET RATIO ASSET TURNOVER OPERATING PROFIT MARGIN RATIO % RETURN ON ASSETS % RETURN ON EQUITY Current ratio 2005 2.380 0.300 0.288 0.104 0.030 0.019 2006 2.320 0.300 0.286 0.081 0.023 0.007 2.370 0.340 0.338 0.135 0.046 0.042 Debt ratio Asset turnover Operating profit margin Return on assets Return on equity ...
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