ACTIVITY # 1 – Financial Statement Analysis and Ratio

Problem 1: Presented below is the incomplete 2020 balance sheet for Pedro Industries.

Pedro Industries
Balance Sheet
December 31, 2020

Assets Liabilities and Shareholders’ Equity

Cash $32,720 Accounts Payable $120,000
Marketable Securities 25,000 Notes Payable ?
Accounts Receivable ? Accruals 20,000
Inventories ? Total Current Liabilities ?
Total Current Assets ? Long-Term Debt ?
Net Fixed Assets ? Stockholders’ Equity $600,000
Total Assets ? Total Liabilities and SHE ?

The following financial data for 2020 are also available:

1. Sales totaled $1,800,000.

2. The gross profit margin was 25%.
3. Inventory turnover was 6.0.
4. There are 365 days in the year.
5. The average collection period was 40 days.
6. The current ratio was 1.60.
7. The total asset turnover ratio was 1.20.
8. The debt ratio was 60%.

Determine the following information: (In case of amounts, round your answer to the nearest whole dollar.
In case of financial ratios, round your answers to the nearest three decimal places.)

1. Accounts Receivable Turnover

2. Average Sale Period
3. Quick Ratio
4. Working Capital
5. Cost of Goods Sold
6. Accounts Receivable
7. Inventories
8. Net Fixed Assets
9. Current Assets
10. Total Assets
11. Notes Payable
12. Current Liabilities
13. Long-Term Debt
14. Total Liabilities
15. Total Liabilities and Shareholders’ Equity
Problem 2: Tecla Printing, Inc., had sales totaling $40,000,000 in fiscal year 2020. Some ratios for the
company are listed below. Use this information to determine the dollar values of various income
statement and balance sheet accounts as requested. (There are 365 days in a year)

Tecla Printing, Inc.

For the Year Ended December 31, 2020
Sales $40,000,000
Gross Profit Margin 80%
Operating Profit Margin 35%
Net Profit Margin 8%
Return on Common Equity 20%
Total Asset Turnover 2
Average Collection Period 62.2 Days

Calculate the values for the following: (In case of amounts, round your answer to the nearest whole dollar.
In case of financial ratios, round your answers to the nearest three decimal places.)

1. Gross Profits
2. Cost of Goods Sold
3. Operating Profits
4. Operating Expenses
5. Earnings Available for Common Stockholders
6. Total Assets
7. Total Common Stock Equity
8. Accounts Receivable Turnover
9. Accounts Receivable
10. Total Liabilities and Shareholders’ Equity