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Consider the following set of financial statements: BETTER MOUSE TRAP, INC.

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Consider the following set of financial statements:
BETTER MOUSE TRAP, INC.
Income Statements
(in 000's, except EPS)
                                             2006 2007 2008
Net Sales $2100 $3051 $3814
Cost of Goods Sold     681     995   1040
Gross Profit   1419   2056   2774
Selling & Admin Expenses     610     705     964
Operating Profit                   809       1351      1810
Interest Expense                     11       75       94
Income Before Tax     798   1276   1716
Income Tax @ 33%     263     421     566
Net Income   $535   $855    $1150
Dividends Paid       0            0             0
Increase in Retained Earnings                 $535 $855     $1150
Avg Number of Common Shares                 2326 2326       2326
EPS                            $0.230   $0.367    $0.494
BETTER MOUSE TRAP, INC.
BALANCE SHEETS
(in 000's) as of Dec 31, years ended:
2006 2007 2008
Assets:
Cash & Equivalents                $224 $103 $167
Accounts Receivable    381    409    564
Inventories    307    302    960
Other Current Assets      69      59      29
Total Current Assets    981    873 1720
Prop. Plant & Equip, Gross 1901 3023 3742
  Less Accum Depr                   (81)    (82) (346)
Prop. Plant & Equip, Net 1820 2941 3396
Other Fixed Assets      58    101    200
Total Assets              $2859    $3915     $5316
Liabilities & Equity:
Accounts Payable                $210 $405 $551
Short Term Debt     35      39      72
Total Current Liabilities                 245          444    623
Long Term Debt     17      19      91
  Total Liabilities                 262    463    714
Common Stock               2062 2062 2062
Retained Earnings   535 1390 2540
  Total Equity               2597 3452 4602
Total Liabilities & Equity                                          $2859     $3915     $5316
a. What is the company's average annual rate of sales growth from 2006 through 2008?
b. How long, on average, was Better Mouse Trap taking to collect on its receivable accounts in 2008? (Assume all of the company's sales were on credit.)
c. Was Better Mouse Trap more or less profitable in 2008 than it was in 2006? Justify your answer using at least two ratios.
d. Was Better Mouse Trap more or less liquid at the end of 2008 than it was at the end of
2006? Justify your answer using at least two ratios.

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