WEEK 3 REQUIREMENT

AVENGERS COMPANY
Income Statement
For the year ended December 31, 2018

Gross Sales 10,800,000

Less: Sales Returns & Allowances -800,000
Net Sales 10,000,000
Cost of Goods Sold 6,000,000
Gross Profit 4,000,000

Operating Expenses:
Doubtful Accounts Expense 40,000
Depreciation Expense 150,000
Rent Expense 400,000
Utilities Expense 500,000
Advertising Expense 300,000
Salaries Expense 610,000 2,000,000

Operating Income/ EBIT/ PBIT 2,000,000

Interest Expense -400,000
Income Before Tax/ EBT/ PBT 1,600,000
Income Tax (30%) 480,000
Net Income/ Profit 1,120,000
Preference Dividends 160,000
Profit Available to Ordinary Shareholders (PAOS) 960,000
 AVENGERS COMPANY
Comparative Statements of Financial Posititon
As of the Years ended December 31,2017 and 2018

2017 2018
Current Assets
Cash and Cash Equivalents 200,000 500,000
Marketable Securities 400,000 500,000
Accounts Receivable 600,000 1,000,000
Allowance for Doubtful Accounts -60,000 -100,000
Inventories 300,000 500,000
Prepaid Expenses 300,000 200,000
Total Current Assets 1,740,000 2,600,000

Noncurrent Assets
Long-term Investments 3,000,000 2,500,000
Property, Plant and Equipment 3,500,000 4,000,000
Accumulated Depreciation -740,000 -890,000
Other Assets 0 290,000
Total Non-Current Assets 5,760,000 5,900,000

TOTAL ASSETS 7,500,000 8,500,000

Current Liabilities:
Accounts Payable 300,000 500,000
Accrued Expenses 300,000 200,000
Short-term Bank Notes Payable 500,000 300,000
Total Current Liabilities 1,100,000 1,000,000

Non-Current Liabilities:
Bonds Payable 1,500,000 2,000,000
Long-Term Notes Payable 2,500,000 2,100,000
Total Non-Current Liabilities 4,000,000 4,100,000

TOTAL LIABILITIES 5,100,000 5,100,000

Shareholders' Equity
Ordinary Share Capital, P100 par value 1,000,000 1,250,000
Preferred Share Capital, P200 par value 1,000,000 1,250,000
Share Premium 300,000 500,000
Retained Earnings 100,000 400,000
Total Shareholders' Equity 2,400,000 3,400,000

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 7,500,000 8,500,000

B. Compute the following Financial ratios:
1. Return on Sales = Profit
Net Sales

= 1,120,000
10,000,000

= 11.20%

2. Return on Assets = OPAT

Ave. Total Assets

= 1,120,000 + (400,000 x 70%)

8,000,000
= 1,400,000
8,000,000

= 17.50%

3. Return on Equity = Profit

Ave. Shareholders' Equity

= 1,120,000
2,900,000

= 38.62%

Ave. Shareholders' Equity = 2,400,000 + 3,400,000

2
= 5,800,000
2
= 2,900,000.00

4. Return on Ordinary Shareholder's Equity = PAOS

Ave. Ordinary SHE

= 960,000
1,493,750
= 64.27%

Ave. Ordinary SHE = 1,150,000 + 1,837,500

2
= 2987500
2
= 1,493,750.00
00

ers' Equity