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Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data...

Assume you are an analyst evaluating Mesco Company. The following data are available in your financial analysis (unless otherwise indicated, all data are as of December 31, Year 5):
Retained Earnings, December 31, Year 4……..$98,000
Gross profit margin ratio……………………………….25%
Acid-test ratio…………………………………………….…2.5 to 1
Noncurrent assets……………………………………….$280,000
Days’ sales in inventory………………………….…….45 days
Days’ sales in receivables………………….…………..18 days
Shareholders’ equity to total debt………………...4 to 1
Sales (all on credit)……………………………………....$920,000
Common stock: $15 par value; 10,000 shares issued and outstanding; issued at $21 per share
Required:
Using these data, construct the December 31, Year 5, balance sheet for your analysis. Operating expenses (excluding taxes and cost of goods sold for Year 5) are $180,000. The tax rate is 40 percent. Assume a 360-day year in ratio computations. No cash dividends are paid in either Year 4 or Year 5. Current assets consist of cash, accounts receivable, and inventories.


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Book4.xls

Sales
Gross profit margin ratio
Cost of goods sold (%)
Cost of goods sold
Days sales in inventory
Inventory stock
Days sales in receivables
Receivables $920,000
25%
75%
$690,000
45
$86,250
18...

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