Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Use the following financial statements of Heifer Sports Inc. in Table 14.14 to find Heifer’s:
a) Inventory turnover ratio in 2012.
b) Debt/equity ratio in 2012.
c) Cash flow from operating activities in 2012.
d) Average collection period.
e) Fixed-asset turnover ratio.
f) Return on equity.

TABLE 14.14 Heiter Sports financial statements
Income Statement
2012
Sales
$5,500,000
Cost of goods sold
Depreciation
Selling & administrative expenses
2,850,000
280,000
1,500,000
EBIT
870,000
Interest expense
Taxable income
130,000
740,000
Тахes
330,000
Net income
$ 410,000
Balance Sheet, year-end
2012
2011
Assets
Cash
$ 50,000
$ 40,000
Accounts receivable
660,000
690,000
Inventory
490,000
480,000
Total current assets
$1,200,000
$1,210,000
Fixed assets
3,100,000
$4,300,000
2,800,000
$4,010,000
Total assets
Liabilities and shareholders' equity
Accounts payable
$ 450,000
550,000
$ 340,000
480,000
$ 820,000
2,520,000
$3,340,000
Short-term debt
Total current liabilities
$1,000,000
Long-term bonds
2,200,000
$3,200,000
Total liabilities
$ 310,000
650,000
$ 960,000
$ 310,000
500,000
Common stock
Retained earnings
Total shareholders' equity
810,000
Total liabilities and
shareholders' equity
$4,300,000
$4,010,000
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Transcribed Image Text:TABLE 14.14 Heiter Sports financial statements Income Statement 2012 Sales $5,500,000 Cost of goods sold Depreciation Selling & administrative expenses 2,850,000 280,000 1,500,000 EBIT 870,000 Interest expense Taxable income 130,000 740,000 Тахes 330,000 Net income $ 410,000 Balance Sheet, year-end 2012 2011 Assets Cash $ 50,000 $ 40,000 Accounts receivable 660,000 690,000 Inventory 490,000 480,000 Total current assets $1,200,000 $1,210,000 Fixed assets 3,100,000 $4,300,000 2,800,000 $4,010,000 Total assets Liabilities and shareholders' equity Accounts payable $ 450,000 550,000 $ 340,000 480,000 $ 820,000 2,520,000 $3,340,000 Short-term debt Total current liabilities $1,000,000 Long-term bonds 2,200,000 $3,200,000 Total liabilities $ 310,000 650,000 $ 960,000 $ 310,000 500,000 Common stock Retained earnings Total shareholders' equity 810,000 Total liabilities and shareholders' equity $4,300,000 $4,010,000
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