Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Balance Sheet and Income Statement for Spectrum, Inc.

[A] find out the following 10 financial ratios & provide a one sentence explanation of the analytic use of each ratio test. Demonstrate your formulas and input. Accuracy to two (2) decimal points is sufficient.
[B] Determine how Spectrum's financial performance compares to their Industry for each computed ratio. It is sufficient to rate each ratio as "G"= good, "S" = satisfactory, or "P" = poor.

1

Current ratio

2

2

Acid test ratio

1.06

3

Debt Ratio

0.58

4

Total asset turnover

1.18

5

Inventory Turnover

5.78

6

Operating Income Return on Investment

9.80%

7

Operating profit margin

8.30%

8

Times interest earned

3.93

9

Average collection period*

75 days

10

Return on Equity

12%

Suppose all sales are credit sales

Spectrum, Inc. BALANCE SHEET (000)

Cash

$500

Accounts receivable

1,500

Inventories

500

Current assets

2,500

Net fixed assets

5,000

Total Assets

$7,500.00

 

 

Accounts payable

1,200

Bank note

300

Total current liabilities

1,500

Long term debt

4,000

Common stock

300

Retained earnings

1,700

Total liabilities and owner's equity

$7,500

Spectrum, Inc. INCOME STATEMENT (000)

Net sales

$8,500

Cost of goods sold

3,400

Gross profit

5,100

Operating expenses

2,900

Net operating income

2,200

Interest expense

580

Earnings before taxes

1,620

Income tax (34%)

551

Net income

$1,069

 

 

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920669

Have any Question? 


Related Questions in Basic Finance

Get rich quick a funds management company is considering an

Get Rich Quick, a funds management company, is considering an investment in a new pharmaceutical company. The company will be unable to pay a dividend until the end of Year 6. If a new product is successfully developed f ...

Explain the difference between a forward contract and an

Explain the difference between a forward contract and an option? What factors distinguish a forward contract from a futures contract? What do forward and futures contracts have in common? What advantages does each have o ...

The following is an excerpt taken from a november 30 2007

The following is an excerpt taken from a November 30, 2007, speech entitled "Innovation, Information, and Regulation in Financial Markets" by Federal Reserve Governor Randall S. Kroszner (www. federalreserve.gov/newseven ...

1 the nominal interest rate is 9 percent and the inflation

1. The nominal interest rate is 9 percent and the inflation rate is 7 percent. What is the real interest rate? 2. Suppose investors face a tax rate of 40 percent on interest received from corporate bonds. Suppose AAA-rat ...

External capital funding proposal External capital funding proposal:  

External capital funding proposal:   For Keurigs Expansion to Europe IDEA:  Bring your finance and economics knowledge to bear by preparing an external capital funding proposal for a major international investment at a p ...

1 explain how uncertainty concerning future interest rates

1. Explain how uncertainty concerning future interest rates would affect the decision to refund a bond issue. 2. Define the following: direct lease, sale-leaseback arrangement, leveraged lease, and financial (capital) le ...

A student remarks 135000000 shares of general electric were

A student remarks: "135,000,000 shares of General Electric were sold yesterday on the New York Stock Exchange, at an average price of $15 per share. That means General Electric just received a little over $2 billion from ...

Explain how closeout netting reduces the credit risk for

Explain how closeout netting reduces the credit risk for two firms engaged in several derivatives contracts ? How does the legal system impose risk on a derivatives dealer? Consider a firm that has assets that generate c ...

Explain the theory of purchasing power parity pppbased on

Explain the theory of purchasing power parity (PPP). Based on this theory, what is a general forecast of the values of currencies in highly inflated countries? Explain how you could determine whether purchasing power par ...

1 create an individual or family plan using the guidance

1. Create an individual or family plan using the guidance provided in FEMA's Are You Ready publication ( http://www.fema.gov/areyouready/ ). Did you find any shortfalls in this program? What did you learn by using the pu ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro