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NOW IT'S YOUR TURN TO DETERMINE THE FINANCIAL HEALTH OF A COMPANY.

Ratios

Assets

Below are the Balance Sheet and Income Statement of a hypothetical publicly-traded company, Sportswear, Inc.  Use the data provided to assess the financial health of the company by calculating the following ratios.

 

 

Assets

Current Year

Prior Year

Current assets

$8,950,000

$7,210,000

Inventory

760,000

640,000

Property, plant, and equipment

13,730,000

12,670,000

Total Assets

$23, 440,000

$20,520,000

 

 

Liabilities

 

 

Current liabilities

$2,480,000

$2,070,000

Long term liabilities

10,970,000

9,560,000

TOTAL LIABILITIES

$13,450,000

$11,630,000

 

 

Stockholders Equity

 

 

Retained earnings

$7,990,000

$6,890,000

Common stock

(20,000 shares)

2,000,000

2,000,000

Total Stockholders Equity

$9,990,000

$8,890,000

Total Liabilities and Stockholders Equity

$23,440,000

$20,520,000

 

 

Income Statement

 

Current Year

Revenue (Sales)

 

$11,500,000

Expenses

 

 

Cost of goods sold

8,100,000

 

Salary expense

1,230,000

 

Rent expense

780,000

 

Interest expense

290,000

 

Total Expenses

 

$10,400,000

Net Income

 

$1,100,000