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Unformatted text preview: 5-6The balance sheet and income statement for the ABC Production Co. are as follows:Balance Sheet ($000)Cash500Accounts receivable2000Inventories1000Current assets3500Net fixed assets4500Total assets8000Accounts payable1100Accrued expenses600Short-term notes payable300Current liabilities2000Long-term debt2000Equity4000Total liabilities and equity8000Income statement ($000)Net sales (all credit)8000Cost of goods sold(3300)Gross profit4700Operating expenses(3000)Net operating income (EBIT)1700Interest expense(367)Earnings before tax1333Income taxes (40%)(533)Net income800Calculate the following ratios:Current ratioGross profit marginDebt ratioOperating profit marginTimes interest earned Net profit marginTotal asset turnoverOperating return on total assetsFixed asset turnoverReturn on total assetsAverage collection periodReturn on equityInventory turnover5-11Agro Ltd has recently applied for a loan from the Western Bank to be used to expand the firm’s inventory of soil pipe used in construction and agriculture. This expansion the firm’s inventory of soil pipe used in construction and agriculture....
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This note was uploaded on 03/23/2011 for the course ECON 200 taught by Professor 1212 during the Three '11 term at Curtin.
- Three '11