Question

BALANCE SHEET ANALYSIS

Complete the balance sheet and sales information using the following financial data:

Total assets turnover: 1.3x
Days sales outstanding: 38 days^a
Inventory turnover ratio: 4x
Fixed assets turnover: 2.5x
Current ratio: 2.3x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30%
^aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.

Balance Sheet
Cash	$		Current liabilities	$
Accounts receivable			Long-term debt	65,000
Inventories			Common stock
Fixed assets			Retained earnings	81,250
Total assets	$325,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Calculating the Balance Sheet and Income Statement information:-

- Total Asset Turnover = Net Sales/Total Assets

1.3 = Net Sales/$325,000

Net Sales = $422,500

- Gross profit margin on sales= (Sales - Cost of goods sold)/Sales

0.30 = (422,500-COGS)/422,500

126,750 =422,500 - COGS

COGS = $295,750

- Days' sales outstanding = (Accounts Receivables/Net Sales)*365

38 = (Accounts Receivables/422,500)*365

Accounts Receivables = $43,986.30

- Inventory turnover ratio = COGS/Inventory

4 =295,750/Inventory

Inventory = $73,937.50

- Fixed assets turnover = Net Sales/Fixed Assets

2.5 = $422,500/Fixed Assets

Fixed Assets = $169,000

- Total Assets = Fixed Assets + Cash +Accounts receivable+Inventory

$325,000= $169,000 + Cash + $43,986.30 + $73,937.50

Cash = $38,076.20

- Current ratio = (Cash +Accounts receivable+Inventory)/Current Liabilties

2.3 = ($38,076.20 + $43,986.30 + $73,937.50)/Current Liabilties

Current Liabilties = $156,000/2.3

Current Liabilties = $67,826.09

- Total Assets = Total liabilities and Equity = $325,000

Total liabilities and Equity = Current Liabilities + Long-term Debt + Common stock + Retained Earnings

$325,000 = $67,826.09 + $65,000 + Common stock + $81,250

Common stock = $110,923.91

Completing the balance sheet and sales information using theabove data:-

Balance Sheet
Cash	$ 38,076.20	Current liabilities	$67,826.09
Accounts receivable	$ 43,986.30	Long-term debt	$ 65,000.00
Inventories	$ 73,937.50	Common stock	$110,923.91
Fixed assets	$ 169,000.00	Retained earnings	$81,250.00
Total assets	$325,000.00	Total liabilities and equity	$ 325,000.00
Sales	$ 422,500	Cost of goods sold	$ 295,750

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