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Apply ratio analysis to financial stateme

 

Apply ratio analysis to financial statements.

Introduction

Note: Accounting requires specific steps that need to be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order.

Ratio analysis is done to compare trends over time.

Ratio analysis is a managerial accounting tool for making and evaluating managerial decisions.

Instructions

Note: Accounting requires specific steps that need to be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order.

Use the Ratio Analysis Template [XLSX] to complete this assessment. Complete the problems based on the data provided in the template.

Competencies Measured

By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:

  • Competency 4: Analyze financial statements.
    • Calculate a current ratio.
    • Calculate an acid-test ratio.
    • Calculate the number of days sales are uncollected.
    • Calculate an inventory turnover.
    • Calculate the amount sold per day in the inventory of an entity.
    • Calculate a debt-to-equity ratio.
    • Calculate the number of times interest is earned.
    • Calculate a profit margin ratio.
    • Calculate a total asset turnover.
    • Calculate a return on total assets.
    • Calculate a return on common stockholders' equity.
  • Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.

Sheet1

BUS-FPX4061 – Managerial Accounting Principles
Assessment 10: Ratio Analysis Worksheet
Problem 1 Input values
Solve the given problem based on the following scenario. Company name Crouch Corp.
Crouch Corp.'s balance sheet and income statement, including all credit sales, are given in the table below. Tax rate 20%
As of December 31, 2016: Balance sheet date 12/31/17
·      Inventories were $15,660. 12/31/16
·      Total assets were $85,410. Inventories $15,660
·      Common stock was $31,950. Total assets $85,410
·      Retained earnings were $11,430. Common stock $31,950
Retained earnings $11,430
Crouch Corp. Income Statement (December 31, 2017) Crouch Corp. Income Statement (December 31, 2017)
Sales $ 283,950 Sales 283,950
Cost of goods sold 212,490 Cost of goods sold 212,490
Gross profit 71,460 Gross profit 71,460
Operating expenses 44,280 Operating expenses 44,280
Interest expenses 1,980 Interest expenses 1,980
Income before taxes 25,200 Income before taxes 25,200
Taxes (at 20%) 5,040 Taxes (at 20%) 5,040
Net income $ 20,160 Net income 20,160
Crouch Corp. Balance Sheet (December 31, 2017)
Crouch Corp. Balance Sheet (December 31, 2017) Assets Amount ($) Liability and Equity Amount ($)
Assets Amount ($) Liability and Equity Amount ($) Cash 5,490 Accounts payable 10,350
Cash 5,490 Accounts payable 10,350 Short-term investment 6,210 Accrued wages payable 2,970
Short-term investment 6,210 Accrued wages payable 2,970 Accounts receivable 10,890 Income taxes payable 2,340
Accounts receivable 10,890 Income taxes payable 2,340 Notes receivable 2,700 Notes payable (long-term) 27,000
Notes receivable 2,700 Notes payable (long-term) 27,000 Inventory 12,150 Common stock 31,500
Inventory 12,150 Common stock 31,500 Prepaid expenses 1,800 Retained earnings 31,590
Prepaid expenses 1,800 Retained earnings 31,590 Plant 66,510
Plant 66,510 Total assets 105,750 Total liability and equity 105,750
Total assets 105,750 Total liability and equity 105,750
TRUE
Compute the following and show your work. TRUE
Ratio Calculation
Current ratio
Days' sales uncollected
Days' sales in inventory
Times interest earned
Total asset turnover
Return on common stockholders' equity
Acid-test ratio
Inventory turnover
Debt-to-equity ratio
Profit margin ratio
Return on total assets

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