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Group Problem Set 1: This problem Set is based on materials covered in module 1/week 1. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review weeks 1 and 2 materials thoroughly.
Finance date of Adams Stores, Inc. for the year ending 2016 and 2017.
Items Sales Cash Other Expenses Retained Earnings Long-term debt Cost of goods sold Depreciation Short-term investments Fixed Assets Interest Expenses Shares outstanding (par value = $4.60) Market Price of stock Accounts Receivable Accounts payable Inventory Notes Payable Accumulated Depreciation Accruals |
2016 |
2017 |
$3,432,000 |
$5,834,400 |
|
9,000 |
7,282 |
|
340,000 |
720,000 |
|
203,768 |
97,632 |
|
323,432 |
1,000,000 |
|
2,864,000 |
4,980,000 |
|
18,900 |
116,960 |
|
48,600 |
20,000 |
|
491,000 |
1,202,950 |
|
62,500 |
176,000 |
|
100,000 |
100,000 |
|
8.50 |
6 |
|
351,200 |
632,160 |
|
145,600 |
324,000 |
|
715,200 |
1,287,360 |
|
200,000 |
720,000 |
|
146,200 |
263,160 |
|
136,000 |
284,960 |
Tax Rate40%40%
Instructions:
As a group, complete the following activities using the financial information above:
Part 1: Financial Statements
Current ratio Quick ratio
Inventory turnover (times) Average collection period (days) Total asset turnover (times) Debt ratio
Times interest earned Gross profit margin Net profit margin Return on total assets Return on equity
P/E ratio
Return on equity using DuPont Analysis
Johnson Products, Inc. |
|
Income Statement |
|
For the Year Ended December 31, 2018 |
|
Sales (40,000 bags at $50 each) ……………………………. |
$2,000,000 |
Less: Variable costs (40,000 bags at $25)……………. |
1,000,000 |
Fixed costs…………………………………………………….. |
600,000 |
Earnings before interest and taxes ………………………… |
400,000 |
Interest expense ………………………………………………….. |
120,000 |
Earnings before taxes …………………………………………. |
280,000 |
Income tax expense (20%) …………………………………… |
56,000 |
Net income ………………………………………………………… |
$ 224,000 |
Based on the information above, calculate (show all calculations and responses in good form):
Specific Instructions: