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TERRIFIC TOYS, INC. |
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Income Statement for Year Ended December 31, 2016 |
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-------------2016---------------- |
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DOLLARS |
% OF SALES |
| Sales Revenue |
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275,000 |
100.00% |
| Cost of Goods Sold |
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182,000 |
66.18% |
| Gross Profit |
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93,000 |
33.82% |
| Selling Expense |
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36,000 |
13.09% |
| General and Administrative Expense |
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28,000 |
10.18% |
| Depreciation Expense |
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8,000 |
2.91% |
| Operating Profits (EBIT) |
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21,000 |
7.64% |
| Interest Expense |
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7,500 |
2.73% |
| Profit Before Taxes |
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13,500 |
4.91% |
| Less: Taxes @ 40% |
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5,400 |
1.96% |
| Net Profit After Taxes |
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8,100 |
2.95% |
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TERRIFIC TOYS, INC. |
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Balance Sheet As of December 31, 2016 |
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-------------2016---------------- |
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DOLLARS |
% OF ASSETS |
| ASSETS: |
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| Cash |
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24,000 |
10.96% |
| Accounts Receivable |
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68,000 |
31.05% |
| Inventories |
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72,000 |
32.88% |
| Total Current Assets |
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164,000 |
74.89% |
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| Net Fixed Assets |
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55,000 |
25.11% |
| TOTAL ASSETS |
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219,000 |
100.00% |
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| LIABILITIES AND EQUITY: |
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| Accounts Payable |
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25,000 |
11.42% |
| Notes Payable |
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50,000 |
22.83% |
| Accruals |
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29,500 |
13.47% |
| Total Current Liabilities |
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104,500 |
47.72% |
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| Long-Term Debt |
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17,500 |
7.99% |
| TOTAL LIABILITIES |
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122,000 |
55.71% |
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| Common Stock at Par Value |
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5,000 |
2.28% |
| Paid-In Capital in Excess of Par Value |
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20,000 |
9.13% |
| Retained Earnings |
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72,000 |
32.88% |
| TOTAL STOCKHOLDERS' EQUITY |
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97,000 |
44.29% |
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| TOTAL LIABILITIES AND EQUITY |
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219,000 |
100.00%
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Please show all calculations for the following:
e. Inventory Turnover: 21.7
f. Times Interest Earned (TIE): 4.8
Industry Average
g. Net Profit Margin: 1.0%
h. Return On Total Assets (ROA): 2.9%
i. Based on the ratios you have calculated above, does Terrific Toys, Inc. appear to be stronger or weaker than the industry average data? Which specific ratios led you to this conclusion?