FINMA PAGE 369

1. FALSE
1. QUICK OR ACID TEST RATIO
2. TRUE
2. INCOME STATEMENT
3. TRUE
3. DUPONT SYSTEM OF ANALYSIS
4. FALSE
4. ANNUAL REPORT
5. TRUE
5. RATIOS
6. FALSE
6. CROSS SECTIONAL ANALYSIS
7. FALSE
7. LIQUIDITY RATIOS
8. FALSE
8. AVERAGE COLLECTION PERIOD
9. FALSE
9. BALANCE SHEET
10. TRUE
10. EARNINGS PER SHARE

page 370
1. a) Current ratio for 2002
28 000/ 10 000 = 2.8

b) Quick ratio for 2002

28 000−8 500
10 000
= 19 500 / 10 000

= 1.95

2. a) Inventory Turnover
3500 000
= 17.5x
200 000

b) Average age turnover

360
17.5
= 21days
3. a) Average collection period
720 000 50 000
360
=
2000
= 25

4. Current Ratio
1300 000
= 1.3
1000 000

5. Quick ratio
1300 000−500 000 800 000
1 000 000
= 1000 000
= 0.8

6. Average Collection Period

400 000 1800 000 sales
5 000
= 80days 360 days
= 5 000 sales per day average.

7. Average Payment Period

500 000
=¿ 500 000
( 1 000 000 )
1944
= 257 days
.70
360

8. Inventory Turnover
1000 000
= 2x
500 000

9. Total Asset Turnover

1800 000
= 0.86
2100 000
10. Fixed asset turnover
1800 000
= 2.25
800 000

11. Net profit margin

374 000
= 0.21
1800 000

12. Gross Profit Margin

800 000
= 0.44
1800 000

13. Operating Profit Margin

600 000
= 0.33
1800 000

14. Return on Assets

374 000
= 0.18
2100 000

15. Return on Equity

374 000
= 0.75
500 000

16. Debt Ratio

1600 000
= 0.76
2100 000

17. Debt to equity ratio

600 000
= 1.2
500 000
 sales
18. account receivables = 360 x average collection period

1080000
= 360
x15

= 45 000

Cost of Goods Sold

19. Inventories = Inventory Turnover

648 000
= 10

= 64 800

20. Total Current Assets = cash+ account receivable+ marketable securities+ inventories
= 10 000+ 45 000+ 20 200+64 800 = 140 000

sales
21. Net fixed assets ¿ asset Turnover

1080 000
= 13.5

= 80 000

22. Total Assets = Total current assets + net fixed assets

= 140 000 + 80 000
= 220 000
Annual Purchases
23. Accounts Payable= 360
x average payment period

.70 x 648 000

= 360
x 55

453 600
= 360 x 55

= 69 300
24. Notes Payable= Total current liabilities – accounts payable – accruals
= 112 000- 69 300- 12 700 = 30 000

Current Assets
25. Current Liabilities = Current Ratio

140 000
= 1.25 = 112 00

26. Long term Debt = Total Liabilities- total current liabilities

Total Liabilities= (Total Asset) (debt ratio)
= 220 000 x .70
= 154 000
Long Term Debt= 154 000 – 112 000 = 42 000

27. Total Liabilities and Stock holder’s Equity

= Total liabilities+ Stockholders equity
= 154 000 + 66 000
= 220 000