FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Use the information from Clean Company's Financial Statements above and calculate
the following financial ratios. Write the interpretation of each one (maximum 3 lines
each) and write a general evaluation of the company (maximum 5 lines):
1. Quick ratio
2. Days inventories
3. Days sales outstanding
4. Cash Cycle
5. Interest coverage
6. ROE
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Transcribed Image Text:Use the information from Clean Company's Financial Statements above and calculate the following financial ratios. Write the interpretation of each one (maximum 3 lines each) and write a general evaluation of the company (maximum 5 lines): 1. Quick ratio 2. Days inventories 3. Days sales outstanding 4. Cash Cycle 5. Interest coverage 6. ROE
Clean Company
Balance Sheet
Cash
68,200
Accounts payable 113,500
Accounts
295,000
Notes payable
73,900
receivable
Other current
Inventories
212,000
101,000
liabilities
Total Current
Total Current
575,200
288,400
assets
liabilities
PP&E Net
257,400
Long-term debt 226,500
Total Equity
317,700
Total Liabilities +
Total Assets
832,600
832,600
Equity
Clean Company
Income Statement
Sales
$1,414,600
Cost of sales
1,190,640
Gross profit
223,960
Operating expenses 125,840
Depreciation
36,520
EBIT
61,600
Interest expenses
21,560
Earnings before
40,040
taxes
Taxes (40%)
16,016
Net profit
24,024
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Transcribed Image Text:Clean Company Balance Sheet Cash 68,200 Accounts payable 113,500 Accounts 295,000 Notes payable 73,900 receivable Other current Inventories 212,000 101,000 liabilities Total Current Total Current 575,200 288,400 assets liabilities PP&E Net 257,400 Long-term debt 226,500 Total Equity 317,700 Total Liabilities + Total Assets 832,600 832,600 Equity Clean Company Income Statement Sales $1,414,600 Cost of sales 1,190,640 Gross profit 223,960 Operating expenses 125,840 Depreciation 36,520 EBIT 61,600 Interest expenses 21,560 Earnings before 40,040 taxes Taxes (40%) 16,016 Net profit 24,024
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