FSA

Assignment 6
Aman Ahmad Urfi
18U00540
Section C
Q) Given the following information create an income statement and balance sheet
Gross profit 30%
Fixed assets 3000
Tax rate 25%
Total liabilities 1500
Expenses 500
Debt to equity 1:3
ratio
Sales 4000
Net working 2000
capital

*Beg RE, Beg OE and Dividend; take all as Zero.

ABC Corp ABC Corp

Income Statement Balance Sheet
Ending December 30,2020 Ending December 30,2020
Sales $4,000 Assets:
Cost of Goods Sold 2800 Current Assets 3000
Gross Profit 1200 Fixed Assets 3000
Expenses 500 Total Assets 6000
EBT 700
Tax 175 Liabilities & O.E:
Net Income 525 Current Liabilities 1000
L.T Liabilities 500
Retained Earnings 525
Paid-up capital 3975
Total 6000
CALCULATE and interpret
1) NWC
Ans) 3000-1000 = 2000, this is a good figure, enough to pay off liabilities
2) Current Ratio
Ans) 3000/1000 = 3. This is a good ratio, shows that we can pay the short term liabilities
3) Net Profit Margin
Ans) 525/4000 = 13.1%. This figure can be improved but it is good enough showing that it is
profitable business.