Financial statement analysis The financial statements of Zach Industries for the yearended December 31, 2015, follow.Zach Industries Income Statementfor the Year Ended December 31, 2015Sales revenueLess: Cost of goods soldGross profitsLess: Operating expensesSelling expenseGeneral and administrative expensesLease expenseDepreciation expenseTotal operating expenseOperating profitsLess: Interest expenseNet profits before taxesLess: TaxesNet profits after taxes$160,000106,000$ 54,000$ 16,00010,0001,00010,000$ 37,000$ 17,0006,100$ 10,9004,360$ 6,540Zach Industries Balance Sheet December 31, 2015AssetsCashMarketable securitiesAccounts receivableInventoriesTotal current assetsLandBuildings and equipmentLess: Accumulated depreciationNet fixed assetsTotal assetsLiabilities and Stockholders’ EquityAccounts payableNotes payableTotal current liabilitiesLong-term debtCommon stockRetianed earningsTotal liabilities and stockholders’ equity$5001,00025,00045,500$72,000$26,00090,00038,000$78,000$150,000$22,00047,00069,00022,95031,50026,550150,000The firm’s 3,000 outstanding shares of common stock closed2015 at a price of $25 per share.A. Use the preceding financial statements to complete the following table. Assume thatthe industry averages given in the table are applicable for both 2014 and 2015.RatioIndustry AverageCurrent ratio1.8Quick ratio*0.70Inventory turnovera*2.50Average collection perioda37.5 DaysDebt ratio 65% 67%65%Times interest earned ratio 3.8 4.03.8Gross profit margin 38% 40%38%Net profit margin 3.5% 3.6%3.50%Return on total assets 4.0% 4.0%*4.0%Return on common equity 9.5% 8.0%9.50%Market/book ratio 1.1 1.21.1Actual 20141.810.782.5936.5 Days67%*4.040%3.60%*4.0%*8.0%1.2Based on a 365-day year and on end-of-year figures.B. Analyze Zach Industries’ financial condition as it is related to (1) liquidity,(2) activity, (3) debt, (4) profitability, and (5) market. Summarize the company’soverall financial condition.Actual 2015__________________________________________________________________________________________________________________________________________________________
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more