Calculate the indicated ratios for hh

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Reference no: EM131960451

Financial Analysis

HH Company

Using the financial statements for HH Company below:

Sales

1,067,500

:ost of goods sold

1,392,500

Selling, general and administrative

145,000

Earnings before interest and taxes (EBIT)

70,000

Federal and state income taxes (40%)

18,200

Net income

27,300

HH Company

Balance Sheet as of December 31, 20XX

Assets

80,500

Accounts Payable

132,000

Accounts Receivable

334,500

Current portion of debt

84,000

Inventories

240,000

Other current liabilities

114,000

 

 

Total current assets

655,000

Total current liabilities

330,000

Net fixed assets

292,500

Long-term debt

256,500

 

 

Total assets

947,500

Total liabilities

586,500

 

 

 

Common equity

361,000

 

 

Total Liabilities Equity

947,500

 

1. Calculate the indicated ratios for HH.

2. Discuss HH's strengths and weaknesses as revealed by your analysis.

3. Suppose HH doubles its sales as well as its inventories, accounts receivable, and common equity during the year. How would that information affect the validity of your ratio analysis?

Your paper should be three pages in length (excluding cover page and references) and formatted according to the Be sure to discuss and reference concepts taken from the assigned textbook reading and relevant research.

Reference no: EM131960451

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