You need some points?

[jashtonrich]

i'll get straight to the point i need some help with a assignment and i have put no time or effort into yet so i was wondering if someone who is knowledgeable in this area can look over it and try to see if there is a better way to explain it to me. if interested let me know and we can discuss points

[shari91]

What class is the assignment for?

[jashtonrich]

What class is the assignment for?

I apologize that should have been included. The class is Marketing I have 2 assignments 3 questions each i believe. It's the BEP (break even point) for one with the income staments from said company etc. And i have to look at a balance statement and calculate the ratio formula

[UntilTheNDofTimE]

post the questions and all info given for the assignment

[shari91]

Marketing was one of my majors so I may be able to help. It's been awhile since I left uni though so I'm not guaranteeing you a kick ass mark however

[OmgUrMom]

hey bud yea I can use some points, don't want to hear any of this bullshiat about homework tho

[Fishhead]

Your in college??????


.............and I've been debating with you on Shrinks disappearance????

[jashtonrich]

Sorry about the delay if interested let me know
COMPANY #1
Balance Sheet
Assets
Current
Cash 30,000
Marketable Securities 20,000
Accountant Receivable 70,000
Inventory 250,000

Long Term
Land 120,000
Building 200,000
Equipment 80,000


Total Assets $770,00
Liabilities And Owner's Equity


Current


Accounts Payable 90,000
Notes Payable 20,000
Current Installments of
Long Term Debt 10,000




Long term
Mortgage Payable 300,000




Total Liabilities $420,000


Owner's Equity

Common Stock
( 125,000 shares outstanding @ $2 ) 250,000


Retained Earnings 100,000


Total Owner's Equity $350,000


Income statements


Sales 550,000
Cost of Goods Sold 330,000
Gross Profit 220,000
Expenses 155,000
Net Profit 65,000


Calculate the following ratios below. Be sure to answer all 3 of these:

1. Show the ratio formula with the correct amounts ( the ratio is listed next to the ratio in bold)
2. List the dollar amounts you used in calculating each ratio and list the answer.
3. Write a 3 sentence description of the meaning of each ratio- be very specific

1. Current Ratio: CA/CL
2. Acid Test Ratio CA-INVENTORY/CL
3. Earnings Per Share NET INC/SHARES OUTSTANDING
4. Return On Sales (net profit margin) PROFIT/SALES
5. Return on Equity PROFIT/EQUITY
6. Debt (Leverage) Ratio TOTAL LIABILITIES/TOTAL ASSETS

COMPANY #2
Balance Sheet
Assets


Current


Cash 25,000
Marketable Securities 0
Accountant Receivable 35,000
Inventory 85,000


Long Term
Land 100,000
Building 50,000
Equipment 30,000


Total Assets $325,000
Liabilities And Owner's Equity


Current


Accounts Payable 30,000
Notes Payable 2,000
Current Installments of
Long Term Debt 5,000




Long term
Mortgage Payable 80,000




Total Liabilities $117,000


Owner's Equity

Common Stock
( 125,000 shares outstanding @ $2 ) 200,000


Retained Earnings 8,000


Total Owner's Equity $208,000


Income statements


Sales 320,000
Cost of Goods Sold 192,000
Gross Profit 128,000
Expenses 96,000
Net Profit 32,000


Calculate the following ratios below. Be sure to answer all 3 of these:

1. 1. Show the ratio formula with the correct amounts ( the ratio is listed next to the ratio in bold)
   2. List the dollar amounts you used in calculating each ratio and list the answer.
   3. Write a 3 sentence description of the meaning of each ratio- be very specific

1. Current Ratio: CA/CL
2. Acid Test Ratio CA-INVENTORY/CL
3. Earnings Per Share NET INC/SHARES OUTSTANDING
4. Return On Sales (net profit margin) PROFIT/SALES
5. Return on Equity PROFIT/EQUITY
6. Debt (Leverage) Ratio TOTAL LIABILITIES/TOTAL ASSETS

[jashtonrich]

Your in college??????


.............and I've been debating with you on Shrinks disappearance????

I think you have the wrong guy Fish head and Yes i'm taking college courses

[shari91]

I'm not even sure what number 1 is asking since the ratio you need to use is already there. Did you already answer that part by adding the ratios or are they part of the question? And what do they mean by 'the correct amounts' if you already have to provide the dollar amounts in the 2nd question?

Providing you with dollar amounts and explanations are easy enough for me to do for #2 and #3. Is that all you need?

Keep in mind you'll be paying me your SBR points until 2020 if you need me to do the whole thing.

[jashtonrich]

I'm not even sure what number 1 is asking since the ratio you need to use is already there. Did you already answer that part by adding the ratios or are they part of the question? And what do they mean by 'the correct amounts' if you already have to provide the dollar amounts in the 2nd question?

Providing you with dollar amounts and explanations are easy enough for me to do for #2 and #3. Is that all you need?

Keep in mind you'll be paying me your SBR points until 2020 if you need me to do the whole thing.

from what i gather # 1 is actually doing the six ratio tests and since the answers are provided then yes seems simple enough. so for instance 1 0f 6 would be the
current ratio (CA/CL) company assets DIVIDED by the liabilities? and
acid test ratio (CA-INVENTORY/LIABILITIES) ASSETS - INVENTORY/LIABILITIES


does this help

[Fishhead]

I think you have the wrong guy Fish head and Yes i'm taking college courses

]]

I'm drunk

Yes, you have the same avatars.

I need some coffee

[jashtonrich]

]] I'm drunk Yes, you have the same avatars. I need some coffee

classic just like my drunk college pal always mistaken someone he has argued with or wanted to while sober but didn't and now that he's drunk the gloves come off. but that's funny fishhead take it black you will recoup quicker and chase it with beer

[shari91]

from what i gather # 1 is actually doing the six ratio tests and since the answers are provided then yes seems simple enough. so for instance 1 0f 6 would be the current ratio (CA/CL) company assets DIVIDED by the liabilities? and acid test ratio (CA-INVENTORY/LIABILITIES) ASSETS - INVENTORY/LIABILITIES does this help

Sorry, I'm still confused. What do they want you to do there? Just spell out the words ie CA = Current assets? CA/CL is the same way of saying Current assets divided by current liabilities. For #2: If the exact words on the assignment are: Acid Test Ratio: CA-Inventory/Liabilities then that is exactly the same thing as writing out each word like this: Current Assets Minus Inventory Divided by Liabilities.

Just doesn't make sense to me that they would only want you to fully write out the words when the abbreviated ratio formulas mean the same thing. Are they just checking to see if you know what the abbreviations mean? If so, then that's just silly and seems too easy for a college class.

[jashtonrich]

that's what i was assuming i guess they want us to just plug in the actual numbers so for instance # 1 (CA)current assets $770,000 divided by or compared to (CL) $420,000 which would be $350,000 or 1.833 if you were to divide, now should you take it to a percentage or ratio this is where i'm confused. this seems too easy and that's what has me stumped

[ouman101]

]] I'm drunk Yes, you have the same avatars. I need some coffee

Your drunk from last night, or from drinking this morning?? If this morning, that sounds fun. I might start

[tltaylor89]

Plug all of that into Excel and you will get your answer.

[shari91]

The actual numbers would answer question #2. Dollar amounts used to calculate each ratio - that's when you bring the numbers in.

Question 1 sucks and doesn't make sense to me so I'm not sure what to tell you about that one.

Your numbers are wrong for the first one. For Current assets you would use: $370,000 as the other $400,000 in assets is listed under long term assets and doesn't apply. For current liabilities you would use: $120,000 for the same reason I just gave for assets. You only use things listed under the current, not long term, for the first ratio.

Express the number as a decimal for this one.

[JerseyLove]

Excel seems like a good thing

[dwaechte]

that's what i was assuming i guess they want us to just plug in the actual numbers so for instance # 1 (CA)current assets $770,000 divided by or compared to (CL) $420,000 which would be $350,000 or 1.833 if you were to divide, now should you take it to a percentage or ratio this is where i'm confused. this seems too easy and that's what has me stumped

It is easy, don't overthink it. They're ratios, just list the decimal answer you get. All they want is for you to write: a) the formulas with numbers plugged in. b) the answer and c) a general description of what the ratio means.

You can probably finish this in 15 minutes.

[shari91]

Answer 3# Current ratio measures a company's liquidity by determining the ratio between current assets and current liabilities, and is the standard measure of a company's financial health. With a CR of 3.08, Company A has $3.08 of current liquid assets to meet every $1.00 of its current financial obligations and therefore has enough assets to cover its liabilities should the need arise immediately. Although this ratio is a common determination of a company's fiscal position, it is important to remember that CR does not take into consideration the timing of cash received in relation to cash owing and therefore should not be the sole measure of Company A's financial health.

You obviously may want to change this to make it sound like you wrote it if you use it

[shari91]

It is easy, don't overthink it. They're ratios, just list the decimal answer you get. All they want is for you to write: a) the formulas with numbers plugged in. b) the answer and c) a general description of what the ratio means.

You can probably finish this in 15 minutes.

So you think they want him to break down each piece of CA and CL for #1 and then put the total dollar amount for CA and CL in #2? Ah, that could be it.

For number 3 he needs descriptions as specific as possible but I agree: This should take him not long at all to finish.

They've given you the ratios jashton so just make sure you plug in the numbers they're specifically asking for.