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Given the information below for John Doe Inc: How much is the firm’s net working capital

Given the information below for John Doe Inc: How much is the firm’s net working capital

 Given the information below for John Doe Inc:

How much is the firm’s net working capital and what is the debt ratio?

Complete a common-sized income statement, a common-sized balance sheet, and a statement of cash flows for 2010. Interpret your results.

John Doe Balance Sheet at 12/31/2009 and 12/31/2010

ASSETS

                                                                                                                                2009                                                       2010

Cash

$ 200

$ 150

Accounts receivable

   450

   425

Inventory

   550

   625

Current assets

$ 1200

$ 1200

Plant and equipment

$ 2200

$ 2600

      Less accumulated depreciation

   (1000)

   (1200)

Net plant and equipment

$ 1200

$ 1400

Total assets

$ 2400

$ 2600

LIABILITIES AND OWNERS’ EQUITY

                                                                                                                2009                                                                       2010

Accounts payable

$ 200

$ 150

Notes payable- current (9%)

        0

   150

Current liabilities

$ 200

$ 300

Bonds

$ 600

$ 600

Owners’ equity

        Common stock

$ 900

$ 900

        Retained earnings

   700

   800

Total owners’ equity

$ 1600

$ 1700

Total liabilities and owners’ equity

$ 2400

$ 2600

John Doe Income Statement for Years Ending 12/31/2009 and 12/31/2010

                                                                                                                2009                                                                       2010

Sales

$ 1200

$ 1450

Cost of goods sold

     700

     850

Gross profit

$   500

$ 600

Selling, general, and administrative expenses

$ 30

$ 40

Depreciation

$ 220

$ 250

$ 200

$ 240

Operating income

$ 250

$ 360

Interest expense

$   50

    64

Net income before taxes

$ 200

$ 296

Taxes (40%)

     80

    118

Net income

$ 120

$ 178

Cash

$ 200

$ 150

Accounts receivable

   450

   425

Inventory

   550

   625

Current assets

$ 1200

$ 1200

Plant and equipment

$ 2200

$ 2600

      Less accumulated depreciation

   (1000)

   (1200)

Net plant and equipment

$ 1200

$ 1400

Total assets

$ 2400

$ 2600

 

Abhinav 04-Dec-2019

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