How am I able to find the net income?

 

 

 

 Profit margin

 

2.     Return on assets

 

3.     Return on equity

 

4.     Receivables turnover

 

5.     Average collection period

 

6.     Inventory turnover

 

7.     Fixed asset turnover

 

8.     Total asset turnover

 

9.     Current ratio

 

10.  Quick ratio

 

11.  Debt to total assets

 

12.  Times interest earned

 

13.  Fixed charge coverage

 

 

 

ABC Corporation

Income Statement

For The Year Ending December 31, 201X

 

Sales (on credit)                                                                                                         $2,640,000

              Less: Cost of goods sold                                                             1,760,000

Gross profit                                                                                                 $  880,000

              Less: Selling and administrative expenses                                616,000*

Operating profit (EBIT)                                                                             $  264,000

              Less: Interest expense                                                                     33,000

Earnings before taxes (EBT)                                                                    $  231,000

              Less: Taxes                                                                                          82,500

Earnings after taxes (EAT)                                                                        $  148,500

 

*Includes $44,000 in lease payments.

 

ABC Corporation

Balance Sheet

December 31, 201X

 

Assets

Current assets:

              Cash                                                                                               $   77,000

              Marketable securities                                                                      44,000

              Accounts receivable (net)                                                             275,000

              Inventory                                                                                           220,000

                             Total current assets                                                     $  616,000

Investments                                                                                                     110,000

              Net plant and equipment                                                              484,000

Total assets                                                                                                 $1,210,000

 

Liabilities and Stockholders' Equity

Current liabilities:

              Accounts payable                                                                        $ 143,000

              Notes payable                                                                                 132,000

              Accrued taxes                                                                                   33,000

                             Total current liabilities                                                $ 308,000

Long-term liabilities:

              Bonds payable                                                                                 220,000

              Total liabilities                                                                             $  528,000

Stockholders' equity                                                                                        

Preferred stock, $110 par value                                                             $  165,000

              Common stock, $5.50 par value                                                    55,000

              Capital paid in excess of par                                                         220,000

              Retained earnings                                                                           242,000

                             Total stockholders' equity                                         $  682,000

Total liabilities and stockholders' equity                                              $1,210,000