1.
Given the profit loss (income statement) and balance sheet for Sam's Sandwich Delivery (Table
4-8), answer the following:
a.
Calculate the following ratios: current, quick, accounts receivable turnover, fixed asset
turnover.
b.
Using the inventory figure on the balance sheet as average inventory, calculate the
inventory turnover ratio.
c.
Calculate the debt-to-equity ratio, debt-to-total asset ratio, and operating profit margin
ratio.
d.
Perform a vertical analysis of the income statement.
e.
Perform a vertical analysis of the balance sheet.
f.
Based on your analysis, would you consider investing in Sam's Sandwich Delivery?
Table 4-8 Financial Statements for Sam's Sandwich Delivery
Profit Loss (Income Statement) for Six Months Ending 06-30-2013
Revenues
Retail Sales
Wholesale Sales
Total Revenues
Cost of Sales
Gross Profit
Total Operating Expenses
Operating Profit
Other Income/Expenses
Interest Income
Interest Expense
Depreciation-Store Equipment
Total Other Income/Expenses
Net Profit
$ 68,283
104,417
$ 172,700
52,067
$ 120,633
111,117
$
9,516
41
(651)
(292)
(902)
$ 8,614
Balance Sheet as of 06-30-2013
Assets
Current Assets
Change Fund
Cash in Bank-Checking
Cash in Bank-Savings
Accounts Receivable
Inventories
Total Current Assets
Fixed Assets
Furniture and Fixtures
Less: Accum Depreciation
Equipment
Less: Accum Depreciation
Transportation Equipment
Less: Accum Depreciation
Total Fixed Assets
$
569
8,612
9,622
6,843
2,607
$ 28,253
4,296
4,110
68,293
67,725
31,168
11,571
186
568
19,597
$ 20,351
Total Assets
Current Liabilities
Accounts Payable Trade
Accrued Payroll Taxes
Accrued Sales Taxes
Total Current Liabilities
Long-Term Liabilities
Auto Loans Payable
Total Long-Term Liabilities
Total Liabilities
Stockholder's Equity
Common Stock
Retained Earnings
Net Profit/Loss
Total Equity
$ 48,604
6,208
3,464
987
$ 10,659
18,626
$ 18,626
$ 29,285
83,081
(72,376)
8,614
19,319