A Financial Statement Analysis

Question 1The recent financial statements for the Royal Caribbean Company are given below:Balance Sheet for the period ending June 30Assets 2006 2005Current assetsCash $21,000 $24,000Accounts receivables $160,000 $162,000Inventories $300,000 $315,000Prepaid expenses $9,000 $10,00Total current assets $490,000 $511,000Property and equipment $810,000 $700,000Total assets $1,300,000 $1,211,000Liabilities and shareholders equityLiabilitiesCurrent liabilities $200,000 $290,00010% bonds payable $300,000 $275,000Total liabilities $500,000 $565,000Shareholders equityCommon stock $5 per share $100,000 $150,000Retained earnings $700,000 $496,000Total liabilities and shareholders equity $1,300,000 $1,211,000Income statement for the year ended June 30Sales $2,100,000 $1,900,000ess cost of goods sold $1,260,000 $1,190,000Gross margin $840,000 $710,000Less operating expenses $660,000 $510,000Net operating income $180,000 $200,000Less interest expense $30,000 $60,000Net income before taxes $150,000 $140,000Less income taxes $45,000 $55,000Net income $105,000 $85,000Notes: Accounts balance at the beginning of 2005 financial year were: Accounts receivable$140 000. Inventory $260,000. All sales were credit.a. Calculate the following ratios for 2006 and 2005.i. Gross margin percentageii. Net income percentageiii. Current ratioiv. Acid test ratiov. Inventory turn overvi. Debt to equity ratiovii. Interest coverb. Briefly comment on the company performance in the area of liquidity and profitability:Question 2Key Ratios for ABC, Inc. and Its IndustryABC, Inc. 1994 Ratios Industry Average Ratios in 1994Current ratio 1.2 1.4Acid test ratio 0.89 0.94Average collection period 30 days 25 daysInventory turnover 18.1 20.3Fixed assets turnover 4.1 4.8Total asset turnover 2.78 2.8Debt ratio 50% 60%Times-interest-earned 5.5% 4.5%Net profit margin 1.15% 1.5%Return on equity 5.21% 7.32%ABC, Inc. Income Statement (in thousands)December 31, 1995Sales (all credit) $200,000Cost of goods sold 140,000Gross profit on sales 60,00Operating expenses 56,000Operating income 4,000Interest expense 1,000Earnings before tax 3,000Income tax 1,050Net income available to common stockholders $1,950ABC, Inc. Balance Sheet (in thousands)December 31, 1995AssetsCash $2,000Accounts receivable 17,800Inventories 8,700Total current assets 28,500Gross fixed assets 70,000Accumulated depreciation 26,500cNet fixed assets 43,500Total assets $72,000Liabilities and EquityAccounts payable $18,000Accruals 13,350Total current liabilities 31,350Long-term debt 8,250Total liabilities 39,600Common stock (par value and paid in capital) 2,000Retained earnings 30,400Total stockholders’ equity 32,400Total liabilities and equity $72,000Required:a. Calculate the following ratios for ABC Inc. for 1995- Average collection period- Inventory turnover- Fixed asset turnover- Current ratio- Acid test ratio- Debt to total asset ratio- Net profit margin- Return on equitb. Comment on the firms liquidity and profitability, taking into consideration the industry averages.Question 3Christmas LSales 600,000Opening stock 50,000Purchases 430,000480,00Less closing stock 60,000 420,000Gross profit 180,000Less running expenses 100,000Net profit before tax 80,000Less interest 8,00Profit before taxes 72,000Less taxes 30,000Profit after tax 42,000Less dividends 2000Retain profits for the year 40,000Christmas LtdBalance sheetas at December 31 2010Fixed assets 140,000Current assets:Stocks 60,000Debtors 2,000Bank and cash 38,000100,000Less current assets 40,000 60,000Net assets employed 200,000=======Share capitalOrdinary shares 20,000Profit and loss account 100,000120,00010 % debentures 80,000Net capital employed 200,000=======Calculate the following ratios1. Current ratio2. Quick Ratio3. Gross margin4. Net Margin5. Inventory turnover ratio6. Clearly explain the term ratio analysis, and list any three limitations of financial statement analysis.

Don't use plagiarized sources. Get Your Custom Essay on
A Financial Statement Analysis
From $8/Page
Order Essay
Toptutor4me
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

Do you need to ace that test? We are here to help you. We have qualified writers to present you with a 100% error-free paper. Toptutor4me offers you a unique and personalized custom paper that will assist you in getting that good grade.

Your paper will go through high editorial standards to meet your satisfaction. We have qualified writers to assist you to reach your academic goal without going through academic stress. We put into consideration the paper formatting, the pages required, valid citations, and included files to present you with an acceptable paper.

Our writers have a comprehensive experience and have perfected the art of crafting your paper. Regardless of the academic level or topic, we are prepared to provide a quality custom paper upon your order request.

Professional Academic Writers

A student needs professional assistance outside class time. Our writers possess Ph.D. in different fields and hold several years’ experience. Before hiring our writers, we give them tests and strictly consider their educational backgrounds.

After the sieving process, they are trained to ensure they deliver well-structured papers to our customers. Our experts work around the clock to provide correct answers and give any educational help. They not only deliver on time but also follow the customers’ instructions.

Every writer is a fluent native speaker of English and is from the USA, Canada, UK, or Australia. Our experts approach tasks effectively depending on their specialization.

Affordable Prices

Is the deal too good to be true? Toptutor4me is a reliable assignment help website on the market that considers students’ daily needs for academic help. Our assignment help is reasonably priced to approximately 90% of students around the world.

Our objective is to help students achieve academic excellence and we believe that inconsiderable charges should not hinder a student from getting the desired help.

In case the customer is not satisfied, we offer revisions and rewrites without extra charges. There are no unpleasant surprise charges at the checkout. We ensure maximum privacy and safe payment services.

On-Time delivery

Tight deadline? Paper due tomorrow? Do not worry our writers are ready to help. Students have difficulties balancing their social and academic life, therefore, getting caught up with academic deadlines.

Tackling your assignment at the last minute does not give you the advantage of carrying out extensive research and coming up with correct answers. Our experienced writers are knowledgeable and always available to work on your paper.

We guarantee you that outstanding papers are delivered on time at the customer's convenience. All you have to do is place an order giving a specific time delivery that works in your favor.

100% Originality

The ultimate deal-breaker in achieving a good grade is submitting an imitative paper. Plagiarism is a breach of examination standards and has serious consequences. Lecturers test the students' understanding of the taught topic by checking for originality.

Our experts' main consideration is providing a free plagiarized paper that will meet the teachers' requirements. They have perfected the skill of presenting unique personalized papers with relevant citations and references if needed. We ensure extreme originality and in case of any customer concerns, we offer a plagiarism report.

We want to work under customer's trust that their paper is unique and will support them in accomplishing the best grade.

Customer Support 24/7

Our website is user-friendly and super useful! Mycoursewriter is an online writing service that is always available to provide you with academic assistance you need.

Customers’ concerns are considered by our friendly customer support team that is available at all times.

Over ten years’ experience in the writing market has enabled us to grow and learn how to give our customers the golden experience.

We have diligently satisfied hundreds of students and you can witness this at the toptutor4me review page. Do not hesitate to contact us at our website email: support@toptutor4me.com

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Are you searching for a satisfactory legitimate writing website? Look no further. Toptutor4me is the best writing service ready to offer you long-term support in your academic needs. We have been providing homework help for years that has gained our customers’ trust. Our writers are ready to work on any assignment type from undergrad to Ph.D. level.

We guarantee you quality papers, timely delivery, and 24/7 response. Our website is not only the cheapest but also authentic and the most unfailing with an assurance team that manages our orders. We offer assignment help in every subject and topic despite the difficulty, let us ease your assignment burden.

Essays

Essay Writing Services

Essay writing is a commonly assigned college homework. Sitting down for an hour or so crafting a perfect essay is a tedious time-consuming task. You might find yourself staring at a blank paper surfing through different websites trying to devise answers for your essay.

Toptutor4me is a legit service that offers to write your essay at a pocket-friendly price. Your essay is given maximum attention by the assigned professional writer who includes fresh ideas and personalizes your paper to your preference. Order essay help by including the question, the page number, preferred format, and any files related to your essay.

Our essays are unique and go through a strict protocol that includes anti-plagiarism and rigorous proofreading. You do not have to struggle with finding ideas for your essay as our writers are not only skilled but also have the correct answers for your paper. Let our scholars work on your essay and you can take care of other responsibilities besides your student tasks.

Admissions

Admission and Business Papers

Writing an admission paper is not everyone’s inclination but this should not be a hindrance to fulfilling your goal. Writing a perfect paper to get you to that school or company imposes mind stress as there are certain expectations you must meet.

Failure to meet these expectations might make your dream unfulfilled. Admission papers require you to be unique, open, and display confidence but not seem aggressive. A business paper necessitates the student to be aware of current happenings in the world and have a wide knowledge of the business history and trends.

These needs research and skills and we have the qualified writers to meet all these prospects that will satisfy your assessor or lecturer. Our team will help you conquer that milestone in your academic life or your career all you need to do is provide the necessary information for our writers to craft your paper.

Editing

Editing and Proofreading

An error-free paper is a must in achieving that desired grade. We have an assurance team to ensure your paper has no grammar or formatting mistakes.

After our writers have given correct answers to your question in the necessary pages, our editorial team proofreads the paper to ensure quality work. They check for grammar mistakes, plagiarism and ensure proper paper formatting.

Issues such as the specified fonts, spacing, and educational formats are considered. We can also provide the plagiarism reports if needed. Our team has skills in formatting any paper type be it MLA, APA, Harvard, or Chicago. Under no circumstances will a poorly formatted paper be forwarded to you as we ensure careful proofreading.

Coursework

Technical Papers

Assignments are part of the learning process and one may not have the knowledge of the correct answers, this should not stress you as we have qualified scholars to help you.

A challenging topic does not imply that you should fail. Our qualified writers hold PhDs in different subjects therefore they are intelligent and no task is complex to them. Despite the complexity, a competent scholar will be assigned to meet your academic needs.

Different assignments are confusing as they may involve different skills that you are not familiar with. This is not an issue to our skilled professional writers as they provide the correct answers for any essay type despite the intricacy. Stop stressing about your homework by ordering assignment help at Mycoursewriter and go have fun!