Paul Sabin has also gathered the following financial data and ratios that are typical of companies in the electronics industry:Current Ratio 2.5Acid-Test Ratio 1.3Average Collection period 18 DaysAverage Sales Period 60 DaysDebt-to-Equity Ratio 0.90Times Interest Earned Ratio 6.0 Comment on the results of your analysis (1) and (2) from the screenshots and images shown and compare Sabin Electronics’ performance to the benchmarks from the electronics industry. Do you think that the company is likely to get its loan application approved? 1. To assist in approaching the bank about the loan, paul has asked you to compute the followingratios for both this year and last year:1. Working capital2. Current Ratio3.Acid-test ratio4. Average collectionperiod365/(Sales/(Average Accounts Receivable))365/(Cost of goods sold/Average Inventories))365/(Cost of goods sold/Average Payable))Average collection period + Average sales period - Averagepayable periodSales/Average Assets8. Debt to equity ratio Total long-term liabilities/Total Equity9.Times Interest EarnedRatio10.Equity Multiplier5. Average sale periodAverage Payable PeriodCurrent Assets - Current LiabilitiesCurrent Assets/Current Liabilities(Current Assets - Inventory - Prepaid expense)/CurrentLiabilities6. Operating cycle7. Total AssetsTurnoverOperating Profit/Interest expenseAverage Total Assets/Average Total EquityThisPastYear Year$720,00 $660,0001.900.69287358441.836.5602.531.801.092558453837.5% 42.0%1.784.891.71 2.Sabin Electronics Balance-SheetCurrent AssetsCashMarketable securitiesAccounts Receivable, NetInventoryPrepaid expensesTotal Current AssetsPlant and Equipment, NetTotal AssetsLiabilities and stockholders' EquityLiabilitiesCurrent LiabilitiesBonds Payable, 12%Total LiabilitiesStockholder's EquityCommon stock, $15 parRetained EarningsTotal Stockholder's EquityTotal Liabilities and EquityThis Year Percent Last Year Percent$70,000 2.3% $150,000 6.1%0.0%18,0000.7%480,000 16.0%300,00012.2%950,000 31.7% 600,00024.4%20,000 0.7% 22,000 0.9%1,520,000 50.7%1,480,000 49.3%3,000,000 100.0%$800,000 26.7%600,000 20.0%1,400,000 46.7%750,000 25.0%850,000 28.3%1,600,000 53.3%3,000,000 100.0%1,090,000 44.3%1,370,000 55.7%2,460,000 100.0%$430,000 17.5%600,000 24.4%1,030,000 41.9%750,000 30.5%680,000680,000 27.6%1,430,000 58.1%2,460,000 100.0%

1. To assist in approaching the bank about the loan, paul has asked you to compute the following…

Answered: Paul Sabin

Business

Accounting

Paul Sabin

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...

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To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) 2. For both this year and last year A. Present the balance sheet in common-size format B. Present the income statement in common-size format down through net income Could you please help me answer Question 10, 2A, and 2B?
You are an investor looking to contribute financially to either company A or Company B. The following, select financial information as follows. Company A and company B, respectively: Beginning Account Receivable $ 50,000, 60,000; Ending Account Receivable $ 80,000, 90,000; Net credit sales $ 550,000, $460,000. Based on the information provided: compute the account receivable turnover ratio. Compute the number of days sales in receivables ratio for both companies A and company B ( round all answers to two decimals places) Interpret the outcomes stating which company you would invest in and why.
To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) Could you please help me answer 4-6?
a) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3. b) Calculate the number of days the average balance of receivables is outstanding before being converted into cash (turnover in days) for Year 2 and Year 3 c) What problem do you see with the company’s credit policy if the terms are net 30 days? Explain your answer.
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2. An interest computed on the maturity value of the loan and is deducted from that amount at loan date to determine the net amount to be received by the borrower. a. Proceeds b. Bank discount c. Principal d. Interest rate 3. Used to find the number of days as numerator to determine the time by assuming that each months has 30 days. Actual time a. b. Approximate time C. Time concept d. Loan time Troy borrowed Php271,050 at simple interest of 12.21% for 2 years. Compute for the interest and maturity value of the loan. 4. Interest a. 33,590.50 b. 66,160.14 c. 33,095.05 d. 66,190.41 5. Maturity value a. 337,240.41 b. 304,640.50 C. 337,210.14 d. 304,145.05
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ou are a credit analyst of a growing commercial bank and have recently received loan applications from two companies of relatively similar size. Show below are selected financial data for these two applicants at the end of the current year: RED CO BLUE CO. Net credit sales P700,000.00 P650,000.00 Cost of goods sold P500,000.00 P490,000.00 Cash P60,000.00 P20,000.00 Accounts receivable (net) P77,000.00 P60,000.00 Inventory P94,000.00 P180,000.00 Current liabilities P110,b00.00 P105,000.00 Assume that the year-end balances for accounts receivable and for inventory approximate the average balances of these items throughout the year. A. Compute the following on RED 1. Inventory turnover 2. Days sales in inventory 3. Operating cycle
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