Tutorial Week 4 (Part 2)

Financial Statement Analysis

Exercise 1: Just Dew It Corporation reports the following balance sheet

information for 2016 and 2017.

Unit: VND in million

31/12/ 31/12/ Liabilities and 31/12/ 31/12/

Assets
2016 2017 Owner Equity 2016 2017

Current assets 75,598 83,848 Current Liabilities 57,217 60,648

Cash 9,279 11,173 Account Payable 41,060 43,805

Account
23,683 25,760 Notes payable 16,157 16,843
Receivable

Inventory 42,636 46,915 Long-term debt 40,000 35,000

Non-current
272,047 297,967 Owner Equity 250,428 286,167
assets

Net plant and

272,047 297,967 Common stock 50,000 50,000
equipment

Retained Earnings 200,428 236,167

Total liabilities and

Total assets 347,645 381,815 347,645 381,815
owner equity

a. For each account on this company’s balance sheet, show the change in the
account during 2017 and note whether this change was a source or use of cash.

b. Based on the balance sheets given for Just Dew It, calculate the following
financial ratios for each year: Current ratio, quick ratio, cash ratio, debt–equity
ratio, total debt ratio and long-term debt ratio.
Exercise 2: Complete the balance sheet and sales information in the table that
follows for the company using the following financial data:
Debt ratio: 0.5
Quick ratio: 0.8
Total assets turnover: 1.5
Day’s sales outstanding (Average Collection Period): 36 days
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =25%
Inventory turnover ratio: 5
Calculation is based on a 360-day year.
Balance sheet
Cash Accounts payable

Account receivable Long term debt 60,000

Inventories Common stock

Fixed assets Retained earnings 97,500

Total assets 300,000 Total liabilities and

equity

Note: The unit is in Million VND and counted by average

Exercise 3: The financial statements of ABC Company are given below.

Income Statement 2017

Unit: VND in million

Sales 8,000,000

Cost of goods sold 5,260,000

Gross profit 2,740,000

Selling and administrative expenses 1,500,000

Operating profit 1,240,000

 Interest expenses 140,000

Income before tax 1,100,000

Tax expense 440,000

Net income 660,000

Balance Sheet on 31st December

Unit: VND in million

Liabilities
31/12/ 31/12/ 31/12/ 31/12/
Assets & Owner
2017 2016 2017 2016
Equity

Current Current
3,240,000 2,500,000 1,400,000 820,000
assets Liabilities

Account
Cash 200,000 50,000 800,000 720,000
Payable

Account Bank loan

1,200,000 950,000 600,000 100,000
Receivable

Bonds
Inventory 1,840,000 1,500,000 900,000 1,000,000
payable

Non- Owner
current 3,200,000 3,000,000 Equity 4,140,000 3,680,000
assets

Common
300,000 300,000
stock

Retained 3,840,000 3,380,000

 Earnings

Total
Total liabilities
6,440,000 5,500,000 6,440,000 5,500,000
assets & owner
equity

Calculate the current ratio, quick ratio, cash ratio, times interest earned ratio,
leverage ratio, DSO, inventory turnover, asset turnover, profit margin, ROA,
ROE for the year 2017.