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BUSI 320 Comprehensive Problem 1

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Question

<p>I need the problems done in word and excel. Here are the instructions: BUSI 320 Comprehensive Problem 1

<br />Use the following information to answer the questions on page 2 below: <br />(Note: all sales are credit sales)<br /><br />Income Stmt info:20152016<br />Sales $ 1,000,000 $ 1,050,000 <br />less Cost of Goods Sold: 400,000 424,000 <br />Gross Profit 600,000 626,000 <br />Operating Expenses 350,000 365,750 <br />Earnings before Interest &amp; Taxes 250,000 260,250 <br />Interest exp 25,000 25,500 <br />Earnings before Taxes 225,000 234,750 <br />Taxes 90,000 93,900 <br />Net Income $ 135,000 $ 140,850 <br /><br />Balance Sheet info:12/31/201512/31/2016<br /> Cash 25,000 $ 30,000 <br /> Accounts Receivable 50,000 $ 51,000 <br /> Inventory 125,000 $ 137,500 <br />Total Current Assets $ 200,000 $ 218,500 <br />Fixed Assets (Net) $ 300,000 $ 315,000 <br />Total Assets $ 500,000 $ 533,500 <br /><br />Current Liabilities $ 110,000 $ 117,700 <br />Long Term Liabilities $ 180,000 $ 183,000 <br />Total Liabilities $ 290,000 $ 300,700 <br />Stockholder’s Equity $ 210,000 $ 232,800 <br />Total Liab &amp; Equity: $ 500,000 $ 533,500 <br /><br /><br /><br /><br /><br /><br /><br />Compute each of the following ratios for 2015 and 2016, and <br /> indicate whether each ratio was getting “better” or “worse” from 2015 to 2016<br /> and was “good” or “bad” compared to the Industry Avg in 2016.<br /> (Round all numbers to 2 digits past the decimal place.)<br /><br />20152016Getting Better or Getting Worse?2016 Industry Avg “Good” or “Bad” compared to Industry Avg<br />Profit Margin0.11<br />Current Ratio1.90<br />Quick Ratio0.66<br />Return on Assets.28<br />Debt to Assets.50<br />Receivables turnover18.00<br />Avg. collection period*21.20<br />Inventory Turnover**8.25<br />Return on Equity0.55<br />Times Interest Earned11.15<br /><br />*Assume a 360-day year<br />**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text <br /> (the one the text indicates many credit reporting agencies generally use).

 
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