Bernadette U.

Tacang September 30, 2023

Financial Management (PMC FM1 M-W 2:30-4:00 pm) BSBA-FM 3A

Chapter 2 Learning Activity

Alithea’s Music Shop

Income Statement
For the Month Ended 31 January 2022

Revenue

Service Revenue P 17,700

Operating Expenses

Salaries Expense 3,770

Rent Expense 1,520

Supplies Expense 230

Depreciation Expense--Equipment 390

Utilities Expense 690

Total Expenses P (6,600)

Net Income P 11, 100

 Alithea’s Music Shop
Statement of Owner's Equity
For the Month Ended 31 January 2022

Owner’s equity at January 31, 2022

Add:

Alithea’s Music Shop, Capital P 37,840

Net Income 11,100

Subtotal 48,940

Deduct:

Alithea’s Music Shop, Drawing (1,100)

Alithea’s Music Shop, Capital P 47, 840

 Alithea’s Music Shop
Balance Sheet
As of 31 January 2022

Current Assets

Cash P 14,710

Office Supplies 1,900

Prepaid Rent 920

Non-Current Assets

Equipment 50,340

Accumulated Depreciation-Equipment (6,010)

TOTAL ASSETS P 61, 860

Current Liabilities

Accounts Payable P 4,400

Salaries Payable 330

Unearned Revenue 4,420

Non-Current Liability

Notes Payable (long-term) 4,870

Total Liabilities 14,020

Equity

Alithea’s Music Shop, Capital P 47,840

TOTAL LIABILITIES + EQUITY P 61, 860

Bernadette U. Tacang October 9, 2023
Financial Management (PMC FM1 M 2:30-4:00 pm) BSBA-FM 3A

Financial Ratio analysis Pre-test

Calculate the following:

1. Working Capital:
Working Capital = Current Assets - Current Liabilities
= P126,000 - P60,000
Working Capital = P66,000

2. Current Ratio:
Current Ratio = Current Assets / Current Liabilities
= P126,000 / P60,000
Current Ratio = 2.1

3. Quick Ratio:
Quick Ratio = (Current Assets - Inventory) / Current Liabilities
= (P126,000 - P80,000) / P60,000
= P46,000 / P60,000
Quick Ratio = 0.77

4. Receivable Turnover:
Receivable Turnover = Sales / Average Accounts Receivable
Average Accounts Receivable = (Beginning Receivables + Ending Receivables) / 2
= (P80,000 + P86,000) / 2
Average Accounts Receivable = P83,000
Receivable Turnover = P830,000 / P83,000
Receivable Turnover = 10

5. Inventory Turnover:
Inventory Turnover = Cost of Goods Sold / Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
= (P100,000 + P110,000) / 2
Average Inventory = P105,000
Inventory Turnover = P525,000 / P105,000
Inventory Turnover = 5
6. Average Collection Period:
Average Collection Period = 365 days / Receivable Turnover
= 365 days / 10
Average Collection Period = 36.5 days

7. Asset Turnover:
Asset Turnover = Sales / Total Assets
= P830,000 / P326,000
Asset Turnover = 2.54

8. Debt to Equity Ratio:

Debt to Equity Ratio = Total Liabilities / Stockholders’ Equity
= (P60,000 + P70,000) / P196,000
= P130,000 / P196,000
Debt to Equity Ratio = 0.66

9. Equity Ratio:
Equity Ratio = Stockholders’ Equity / Total Assets
= P196,000 / P326,000
Equity Ratio = 0.60

10. Debt Ratio:

Debt Ratio = Total Liabilities / Total Assets
= (P60,000 + P70,000) / P326,000
= P130,000 / P326,000
Debt Ratio = 0.40