Given the profit loss (income statement) and balance sheet for Sam’s Sandwich Delivery (Table 4-8),.
Given the profit loss (income statement) and balance sheet for Sam's Sandwich Delivery (Table 4-8), answer the following:
a. Calculate the following ratios: current, quick, accounts receivable turnover, fixed asset turnover.
b. Using the inventory figure on the balance sheet as average inventory, calculate the inventory turnover ratio.
c. Calculate the debt-to-equity ratio, debt-to-total asset ratio, and operating profit margin ratio.
d. Perform a vertical analysis of the income statement.
e. Perform a vertical analysis of the balance sheet.
f. Based on your analysis, would you consider investing in Sam's Sandwich Delivery?
Table 4-8 Financial Statements for Sam's Sandwich Delivery
Profit Loss (Income Statement) for Six Months Ending 06-30-2013
Revenues
Retail Sales
$68,283
Wholesale Sales
104,417
Total Revenues
$172,700
Cost of Sales
52,067
Gross Profit
$120,633
Total Operating Expenses
111,117
Operating Profit
$ 9,516
Other Income/Expenses
Interest Income
41
Interest Expense
(651)
Depreciation-Store Equipment
(292)
Total Other Income/Expenses
(902)
Net Profit
$ 8,614
Balance Sheet as of 06-30-2013
Assets
Current Assets
Change Fund
$ 569
Cash in Bank-Checking
8,612
Cash in Bank-Savings
9,622
Accounts Receivable
6,843
Inventories
2,607
Total Current Assets
$ 28,253
Fixed Assets
Furniture and Fixtures
4,296
Less: Accum Depreciation
4,110
186
Equipment
68,293
Less: Accum Depreciation
67,725
568
Transportation Equipment
31,168
Less: Accum Depreciation
11,571
19,597
Total Fixed Assets
$ 20,351
Total Assets
$ 48,604
Current Liabilities
Accounts Payable Trade
6,208
Accrued Payroll Taxes
3,464
Accrued Sales Taxes
987
Total Current Liabilities
$ 10,659
Long-Term Liabilities
Auto Loans Payable
18,626
Total Long-Term Liabilities
$ 18,626
Total Liabilities
$ 29,285
Stockholder's Equity
Common Stock
83,081
Retained Earnings
(72,376)
Net Profit/Loss
8,614
Total Equity
19,319
Total Liabilities and Equity
$ 48,604
