problem Set

   Finance bound of Adams Stores, Inc. for the year achievement 2016 and 2017. Items 2016 2017 Sales $3,432,000 $5,834,400 Cash 9,000 7,282 Other Expenses 340,000 720,000 Retained Earnings 203,768 97,632 Long-term score 323,432 1,000,000 Cost of good-natureds sold 2,864,000 4,980,000 Depreciation 18,900 116,960 Short-term investments 48,600 20,000 Fixed Assets 491,000 1,202,950 Interest Expenses 62,500 176,000 Shares ungathered (par esteem =$46.00) 100,000 100,000 Market Price of supply 8.50 6 Accounts Receivable 351,200 632,160 Accounts payable 145,600 324,000 Inventory 715,200 1,287,360 Notes Payable  200,000 720,000 Accumulated Depreciation 146,200 263,160 Accruals 136,000 284,960 Tax Rate 40% 40% Instructions: Complete the forthcoming activities using the financial advice overhead: Part 1: Financial Statements A. Prepare the pay assertion for 2016 and 2017. Include assertion of retained earnings for 2017. The troop remunerated $11,000 dividend in 2017. B. Prepare the adjust equivocation for 2016 and 2017 C. Prepare Common-Size financial assertions of pay assertion and adjust sheet. D. Prepare Assertion of Cash Flows.  Part 2: Financial Assertion Analysis A. Based on your financial assertions (from Part 1), estimate the forthcoming ratios for the two years. Pretence all your cares in good-natured-natured devise. Pretence your deviseulas. If you use exceed, each care insufficiency to pretence the exceed deviseula Current ratio Quick ratio Inventory turnover (times) Average collation continuance (days) Total asset turnover (times) Debt ratio Times concern earned Gross gain margin Net gain margin Return on aggregate assets Return on equity P/E ratio Return on equity using DuPont Analysis B. Comments on the ratios by comparing 2016 to 2017 ratios. C. Assume Adams Stores, Inc. is a vend troop homogeneous to WalMart, Myers, or Target. Compare 2017 ratios to the activity medium. Please voice that Adams Stores, Inc. is not a true troop. To perceive approximate activity ratios, you insufficiency to exploration for activity ratios for vend. See advice on Moodle for instructions on how to perceive activity ratios. Based on the activity medium, how is Adams Stores, Inc. doing financially?  Part 3: Break-even, Financial and Unreserved Leverages Johnson Products, Inc. Income Statement For the Year Ended December 31, 2018 Sales (40,000 bags at $50 each) .................................. $2,000,000 Less: Variable costs (40,000 bags at $25)................ 1,000,000 Fixed costs.............................................................. 600,000 Earnings precedently concern and taxes .............................. 400,000 Interest outlay ........................................................... 120,000 Earnings precedently taxes ................................................. 280,000 Income tax outlay (20%) .......................................... 56,000 Net pay .................................................................. $ 224,000 Based on the advice overhead, estimate (pretence all cares and responses in good-natured form): a. Break-even in units (in dollars and units). Explain what your quantity balance. As a manager, how would you use the quantity in financial planning? b. What is the station of financial leverage? Explain what your estimate balance. As a manager, how would you use the quantity in financial planning? c. What is the station of unreserved leverage? Explain what your estimate balance. As a manager, how would you use the quantity in financial planning?