The intent of this assignment is just basic accounting and financial statement construction. These will get more complicated over the course of the semester, but this one is just to ensure that everyone is on the same page. Pay close attention to the notes at the end of the assignment and the definitions posted to the blackboard site (Ratio Definitions and Case Analysis). Check the syllabus for the due date! Below are numbers from a balance sheet and income statement. Construct the financial ratios requested below. Sales 450512 Operating Costs 330307 Depreciation 10000 Interest 5000 Taxes 29408 Cash 1000 Receivables 30000 Inventories 55051 Fixed Assets, Net 50000 Payables 11000 Accrued Expenses 10000 Long-Term Loan 50000 Common Equity 65051 DEPARTMENT OF MANAGEMENT, SCHOOL OF BUSINESS ADMINISTRATION Holman Hall 339 | University, MS 38677-1848 | (662) 259-0163 | | Assignment Notes: ? Answers are correct if they are within 5% of the correct response. ? Submit as many times as you would like before the submission deadline. I will take the most recent submissions. ? Use excel to solve these problem. It reduces rounding problems and is an important skill to have. Grade appeals will be based on your Excel sheet. ? Submitted answers should have two decimals places (i.e, 0.01). For things that are percentages, submit them as 2 whole numbers and two decimal places – 23.20%. The margin for error on the grade is based off a two-decimal place calculation. ? Definitions for the ratios are on the course site (towards the bottom). Be careful, ROA, for example has several different definitions in the popular press so stick to these definitions rather than something you find through Google. ? Accruals are debts that are soon due but have not yet been paid out – things like the salary owed to employees between pay periods show up as accruals Assignment: Prepare an income statement and a balance sheet for is company using the information provided. Calculate: 1. Current ratio 2. Quick ratio 3. NWC-to-total-Assets (Working capital to assets) 4. Ratio of total debt and liabilities to total assets 5. Ratio of total debt and liabilities to shareholder’s equity 6. Interest coverage 7. Net profit margin 8. Sales to total assets (Asset turnover) 9. Return on assets 10. Equity multiplier 11. Return on equity Instructions: Submit your answers to the Google Docs website: Submission link Do not email me your responses. DEPARTMENT OF MANAGEMENT, SCHOOL OF BUSINESS ADMINISTRATION Holman Hall 339 | University, MS 38677-1848 | (662) 259-0163 | |