1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
EleoNora [17]
2 years ago
9

Paul Sabin organized Sabin Electronics 10 years ago to produceand sell several electronic devices on which he had securedpatents

. Although the company has been fairly profitable, it is nowexperiencing a severe cash shortage. For this reason, it isrequesting a $620,000 long-term loan from Gulfport State Bank,$160,000 of which will be used to bolster the Cash account and$460,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow:
Sabin Electronics
Comparative Balance Sheet
This Year Last Year
Assets
Current assets:
Cash $ 118,000 $ 270,000
Marketable securities 0 30,000
Accounts receivable, net 633,000 420,000
Inventory 1,065,000 715,000
Prepaidexpenses 30,000 34,000
Total currentassets 1,846,000 1,469,000
Plant and equipment,net 1,969,200 1,490,000
Total assets $ 3,815,200 $ 2,959,000
Liabilitiesand Stockholders Equity
Liabilities:
Currentliabilities $ 820,000 $ 420,000
Bondspayable, 12% 850,000 850,000
Totalliabilities 1,670,000 1,270,000
Stockholders'equity:
Commonstock, $15 par 630,000 630,000
Retained earnings 1,515,200 1,059,000
Total stockholders equity 2,145,200 1,689,000
Total liabilitiesand equity $ 3,815,200 $ 2,959,000
Sabin Electronics
Comparative Income Statement and Reconciliation
This Year Last Year
Sales $ 5,600,000 $ 4,710,000
Cost of goodssold 3,995,000 3,570,000
Gross margin 1,605,000 1,140,000
Selling andadministrative expenses 677,000 572,000
Net operatingincome 928,000 568,000
Interestexpense 102,000 102,000
Net income beforetaxes 826,000 466,000
Income taxes(30%) 247,800 139,800
Net income 578,200 326,200
Commondividends 122,000 101,000
Net incomeretained 456,200 225,200
Beginning retainedearnings 1,059,000 833,800
Ending retainedearnings $ 1,515,200 $ 1,059,000
During the past year, the companyintroduced several new product lines and raised the selling priceson a number of old product lines in order to improve its profitmargin. The company also hired a new sales manager, who hasexpanded sales into several new territories. Sales terms are 2/10,n/30. All sales are on account.
e. The average sale period. (Theinventory at the beginning of last year totaled$620,000.)(Round your intermediate calculations and finalanswers to 1 decimal place. Use 365 days in a year.)
f. The operating cycle.(Round your intermediate calculations and final answer to 1decimal place.)
g. The total asset turnover. (The total assets at the beginning oflast year were $2,919,000.) (Round your answers to 2decimal places.)
h. The debt-to-equity ratio.(Round your answers to 3 decimal places.)
i. The times interest earned ratio.(Round your answers to 1 decimal place.)
j. The equity multiplier. (Thetotal stockholdersâ equity at the beginning of last year totaled$1,679,000.) (Round your answers to 2 decimalplaces.)
Business
1 answer:
Semenov [28]2 years ago
6 0

Answer:

e. The average sales period = (average balance inventory / COGS) x 365 days =  {[($1,065,000 + $715,000)/2] / $3,995,000} x 365 days = 81.3 days

f. The operating cycle = average sales period + (average accounts receivable / total credit sales) x 365 days = 81.3 + {[($633,000 + $420,000)/2] / $5,600,000} x 365 days = 81.3 + 34.3 = 115.6 days

g. The total asset turnover = total sales / average assets = $5,600,000 / [($3,815,200 + $2,959,000)/2 = 1.66 times

h. The debt-to-equity ratio = total liabilities / total equity = $1,670,000 / $2,145,200 = 0.778 or 77.8%

i. The times interest earned ratio = EBIT / interest expense = $928,000 / $102,000 = 9.1

j. The equity multiplier = total assets / total equity = $3,815,200 / $2,145,200 = 1.78

You might be interested in
The area of a project site that is used by the building structure, defined by the perimeter of the building plan is the:
Gekata [30.6K]
Answer:  "building footprint" .
_____________________________________
6 0
3 years ago
Mountain Products has decided to raise $6 million via a rights offering. The company will issue one right for each share of stoc
storchak [24]
I think the answer is E
4 0
3 years ago
The goal of customer relationship management is to
viktelen [127]
Enhancing, Retaining, Satisfying and Attracting.
6 0
3 years ago
What is the correct order that the four parts of a cover letter should appear in? a. Introduction, Heading, Argument, Closing b.
NemiM [27]
I’m thinking (a., because im pretty sure you need to have the heading before make an argument.
6 0
2 years ago
Kirsten is experiencing a great deal of anxiety about her first Algebra II test. "I know that Mr. Dade has a reputation for bein
topjm [15]

Answer:

Stereotype threat

Explanation:

Stereotype refers to preconceived perspective about a particular people or group. Stereotype threat, coined by Claude Steele and Joshua Aronson, refers to a way a person behaves that tend to confirms the negative stereotype about a particular race, gender and others. In Kristen's case the added stress generated by her anxiety about the Algebra II test  as a result of the supposedly tough teacher coupled with the preconceived notion that girls are not good in math may lead to her actually failing the test or performing badly. If this feeling were to be removed she may not actually fail or perform poorly in the exam.

6 0
3 years ago
Other questions:
  • Susan has a 401k plan through her job and has accumulated $375,000 in her account. Her company has invested her funts in a high
    9·1 answer
  • During 2018, its first year of operations, Pave Construction provides services on account of $154,000. By the end of 2018, cash
    10·1 answer
  • Kirsty is going to open a jewellery business. which of the following production methods should she use job , batch or flow produ
    10·1 answer
  • Suppose the president is attempting to decide whether the federal government should spend more on research to find a cure for he
    5·1 answer
  • Firms in the chemical industry, which must contend with frequently changing environmental regulations and the risk of dangerous
    15·1 answer
  • Why are supply and demand curves sloping in opposite directions?
    11·1 answer
  • Which of the following best describes the journal entry to record the withdrawal of raw materials from the storeroom for use as
    7·1 answer
  • Use context clues to explain the meaning of the word interdependence in your own words.
    14·1 answer
  • Balance sheet is a statement of what?​
    13·1 answer
  • Exercise 12-1 Payback Method [LO12-1] The management of Unter Corporation, an architectural design firm, is considering an inves
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!