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
