Reference no: EM13356408
Calculating the approximate amounts for the current year\'s balances in the form of a balance sheet and income statement using financial ratios.
Reflect the relationships maintained by convington pike in recent years
Profit margin on sales =5%
return on assets =7.5%
Gross profit margin =40%
inventory turnover ratio = 6times
receivables turnover ratio = 25
acid- test ratio = .9
current ratio = 2 to 1
return on shareholders\' equity = 10%
debt to equity ratio = 1/3
times interest earned ratio = 12 times
jotted in the margins are the following notes:
net income $15,000
Only one short-term not (5,000); all other current Liabilities are trade accounts
property, plant, and equipment are the only noncurrent assets
bond payable are the only noncurrent liabilities
the effective interest rate on short - term notes and bonds is 8%
no investment securities
Cash balance totals $15,000
required:
you are requested to approximate the current year\'s balances in the form of a balance sheet and income statement, to the extent the information allows. Accompany those financial statement with the calculations you used to estimate each amount reported.