Question

Note: Please use excel 1. XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense...

Note: Please use excel

1. XYZ Inc., has sales of $800,000, costs of $375,000, depreciation expense of $85,000, interest expense of $50,000, and a tax rate of 35%. What is the net income of this firm?

The income statement for the company is:

2. Beakman, Inc has net working capital of $1,700, current liabilities of $4,100, and inventory of $2,900. What is the current ratio? What is the quick ratio?

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Homework Answers

Answer #1

Ans 1) $ 188500

SALES 800000.00
LESS COSTS 375000.00
LESS DEPRECIATION 85000.00
LESS INTEREST 50000.00
INCOME BEFORE TAX 290000.00
LESS TAX @ 35% 101500.00
NET INCOME 188500.00

Ans 2) CURRENT RATIO = 1.41

QUICK RATIO = 0.71

CURRENT ASSETS = NET WORKING CAPITAL + CURRENT LIABILITIES
1700 + 4100
5800
CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES
5800 / 4100
1.41
QUICK RATIO = (CURRENT ASSETS - INVENTORY) / CURRENT LIABILITIES
(5800 - 2900) / 4100
0.71
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