XYZ Corporation

Income Statement
For the Year Ended December 31, 2021
Income

Sales 185,000

Total Income 185,000

Expenses

Employees’ Salaries 20,000

Sales Commissioners 15,000

Advertising 10,000

Merchandise Inventory

Beginning Merchandise Inventory 16,000

Add: Purchases of Merchandise 85,000

Total: Goods Available for Sale 101,000

Less: Ending Merchandise Inventory 9,000

Cost of Goods Sold 92,000

Other Operating Expenses 30,000

Total Expenses 167,000

Net Income 18,000

 XYZ Corporation
Balance Sheet
December 31, 2021
Assets

Cash 10,000

Accounts Receivable 9,500

Finished Goods Inventory 3,280

Material Inventory 474

Building and Equipment’s 100,000

Land 50,000

Less: Accumulated Depreciation (60,000)

Total Assets 113,254

Liabilities and Owners Equity

Liabilities

Accounts Payable 2,200

Income Tax Payable 4,000

Owners Equity

Common Stock, no par 70,000

Retained Earnings 37,054

Total Liabilities and Owners Equity 113,254

 XYZ Corporation
LIQUIDITY

Current Ratio = 113, 254

6,200

= 18.27

Quick Ratio = 113,254 – 3,754

6,200

= 17.66

ACTIVITY

Inventory Turnover = 92,000

3,754

= 24.51

Average Age of Inventory = 365

24.51

= 14.89

Average Collection Period = 9,500

185,000

365

= 9,500

506.85

= 18.74

Average Payment Period 2,200

85,000

365

= 2,200

232.88

= 9.45
Total asset turnover = 185,000

113,254

= 1.63

DEBT

Debt Ratio = 6,200

113,254

= 0.055 or 5.5%

Times Interest Earned Ratio

= 18,000 = 4.5

4,000

PROFITABILITY

Gross Profit Margin = 185,000 – 92,000

185,000

= 0.503

Or

50.3%

Operating Profit Margin = 18, 000

185,000

= 0.097 or 9.7%