Project FINANCE AND BUDGET

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Assignment 1

 

 

 

  1. What is the Balance Sheet?  What does it tell us about an organization?

 

 

 

  1. What is the Income Statement?  What does it tell us about an organization?

 

 

 

  1. What is the Cash Flow Statement?  What does it tell us about an organization?

 

 


 

 

  1. Using the data from the following Financial Statements, compute:

    1. Current ratio:                                                                                

    2. Quick ratio:                                                                                   

    3. Profit margin on sales:                                                                 

    4. Return on total assets:                                                                 

    5. Return on equity:                                                                          

       

 

Balance Sheet

 Ajax Corp.

 

 Acme, Inc.

Cash

$2,255,000

 

 $67,000

Accounts Receivable

 $565,000

 

 $1,110,000

 Inventory

 $1,332,000

 

 $2,441,000

       

Total Current Assets

$4,152,000

 

 $3,618,000

       

Net Property, Plant and Equipment

$369,000

 

 $1,327,000

Other Assets

 $211,000

 

 $597,000

       

Total Assets

 $4,732,000

 

 $5,542,000

       

Accounts Payable

 $27,000

 

 $168,000

Notes Payable Sort Term

 $426,000

 

 $819,000

Other Short Term Liabilities

 $2,000

 

 $56,000

       

Total Current Liabilities

 $455,000

 

 $1,043,000

       

Notes Payable Long Term

 $1,222,000

 

 $943,000

       

Total Liabilities

 $1,677,000

 

 $1,986,000

       

Stockholders’ Equity

 $3,055,000

 

 $3,556,000

       

Total Liabilities and Stockholders’ Equity

 $4,732,000

 

 $5,542,000

 

 


 

 

Income Statement

 Ajax Corp.

 

 Acme, Inc.

Sales

 $32,752,000

 

 $4,835,000

Cost of Sales

 $28,273,000

 

$2,966,000

       

Gross Profit

 $4,479,000

 

$1,869,000

       

Selling, General and Administrative Expenses

 $2,541,000

 

 $912,000

       

Income before Interest and Taxes

 $1,937,000

 

 $957,000

       

Interest Expense

 $129,000

 

 $88,000

       

Income before Taxes

 $1,808,000

 

 $869,000

       

Taxes

 $723,000

 

 $280,000

       

Net Income

 $1,085,000

 

 $589,000

 

 

 

  1. What does each of these financial ratios tell us about a company?

    1. Current ratio

       

    2. Quick ratio:

       

    3. Profit margin on sales:

       

    4. Return on total assets:

       

    5. Return on equity:

 

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