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Question 1
Increase/Decrease
Assets
2011
Current assets:
Cash
Accounts receivable
Inventory
Plant and equipment
Total assets
2010
Amount
1,844.00
11,807.00
9,628.00
158,700.00
3,278.00
6,954.00
17,417.00
144,500.00
181,979.00 $
172,149.00 $
(1,434.00)
4,853.00
(7,789.00)
14,200.00
9,830.00
13,446.00
650.00
4,124.00
18,220.00 $
9,250.00
1,110.00
3,650.00
14,010.00 $
4,196.00
(460.00)
474.00
4,210.00
Long-term liabilities:
Total long-term liabilities
Total liabilities
$
$
92,800.00 $
111,020.00 $
75,800.00 $
89,810.00 $
17,000.00
21,210.00
Owner's equity:
Total owner's equity
70,959.00 $
82,339.00 $
(11,380.00)
181,979.00 $
172,149.00 $
9,830.00
Question 2
Ratios
Current Ratio
Total Debt to Total Assets
2011
10
0.7
2010
12.3
0.6
Question 3
The accounts receivable has increased from last year. The inventory level however has decreased.
This means that the company has increased their credit sales. Looking at the company debt, that has increased by 22%
whereas the companies fixed assets have increased by 10%. The owner of the company had a decrease in his equity.
That can mean one of two things, either he withdrew capital from the company or the company did not make any profits.
When looking at all the numbers it shows that the companies cash does not seem to be doing so great.
2010-11
Increase/Decrease
Percent
2011
2010
-14.6
49.4
-79.2
144.5
1.0
6.5
5.3
87.2
1.9
4.0
10.1
83.9
100
100
100
42.7
-4.7
4.8
42.8
7.4
0.4
2.3
10.0
5.4
0.6
2.1
8.1
172.9
215.8
51.0
61.0
44.0
52.2
-115.8
39.0
47.8
100
100
100
ner's equity
BALANCE SHEET
AMOUNT
PERCENT
CURRENT ASSETS
Cash
Accounts Recievable
Merchandise Inventory
Equipment
Total Assets
INCOME STATEMENT
Net Sales
4000
6000
15000
15000
40000
10.0
15.0
37.5
37.5
100.0
CURRENT LIABILITIES
Accounts Payable
Wages Payable
Insurance Payable
Total Liabilities
3500
1500
500
5500
8.8
3.8
1.3
13.8
Salary
Insurance
Utilities
Rent
Depreciation
34500
6.4
0.3
86.3
100.0
Net Income
AMOUNT
PERCENT
120000
100.0
85000
70.8
35000
29.2
8000
500
6500
15000
2000
32000
6.7
0.4
5.4
12.5
1.7
26.7
3000
2.5