What is the Balance Sheet?
- What is the Balance Sheet? What does it tell us about an organization?
- What is the Income Statement? What does it tell us about an organization?
- What is the Cash Flow Statement? What does it tell us about an organization?
- Using the data from the following Financial Statements, compute:
- Current ratio:
- Quick ratio:
- Profit margin on sales:
- Return on total assets:
- Return on equity:
| Balance Sheet | Ajax Corp. | Acme, Inc. | |
| Cash | $2,255,000 | $67,000 | |
| Accounts Receivable | $565,000 | $1,110,000 | |
| Inventory | $1,332,000 | $2,441,000 | |
| Total Current Assets | $4,152,000 | $3,618,000 | |
| Net Property, Plant and Equipment | $369,000 | $1,327,000 | |
| Other Assets | $211,000 | $597,000 | |
| Total Assets | $4,732,000 | $5,542,000 | |
| Accounts Payable | $27,000 | $168,000 | |
| Notes Payable Sort Term | $426,000 | $819,000 | |
| Other Short Term Liabilities | $2,000 | $56,000 | |
| Total Current Liabilities | $455,000 | $1,043,000 | |
| Notes Payable Long Term | $1,222,000 | $943,000 | |
| Total Liabilities | $1,677,000 | $1,986,000 | |
| Stockholders’ Equity | $3,055,000 | $3,556,000 | |
| Total Liabilities and Stockholders’ Equity | $4,732,000 | $5,542,000 |
| Income Statement | Ajax Corp. | Acme, Inc. | |
| Sales | $32,752,000 | $4,835,000 | |
| Cost of Sales | $28,273,000 | $2,966,000 | |
| Gross Profit | $4,479,000 | $1,869,000 | |
| Selling, General and Administrative Expenses | $2,541,000 | $912,000 | |
| Income before Interest and Taxes | $1,937,000 | $957,000 | |
| Interest Expense | $129,000 | $88,000 | |
| Income before Taxes | $1,808,000 | $869,000 | |
| Taxes | $723,000 | $280,000 | |
| Net Income | $1,085,000 | $589,000 |
- What does each of these financial ratios tell us about a company?
- Current ratio
- Quick ratio:
- Profit margin on sales:
- Return on total assets:
- Return on equity:
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