Financial Statements of Business Organizations: Analysis of

< Submission Assignmen .Financial St tem nts... Apr 8, 2023 at 8:14 PM Assignment: Financial Statements of Business Organizations by Linda Williams in Accounting for Managers by Lumen Learning is licensed under CCVBY 4.0 Because the ratio is less than the industry ratio. it means that the Times-interest-earned company may not be able to repay ratio=(EBlT)/(tota| interest =(IS,DOD)r(S,000) its debt and looks bad tor accounts expense) :3 payable, This ratio is significantly lower than the industiy ratio of 5.25. This means that the enterprise is not in a ROE=(Net income)/ =(7,500)f(12,500) position to realize profits unless it (shareholder's equity) =0.G has more capital added. Our business ratio is 4.33 lower than Average inventory Turnover the industry ratio, which means that Ratio: (Cost of Goods Sold)! =(8255,000)I(S]00,000) inventory is not selling properly. Average Inventory) =255 Stocks would need to he reassessed, Payables Turnover Ratio= Purchases/(Accounts =(500.000)/(10,250) Payable) =48.78 Average Receivables Turnover Ratio=(net sales)! Pre»paid income appeals to have (Average accounts =(500,000)/(-10,000) been incorrectly recorded as receivable) =—5() negative, Average Collection Period Ratio:365/(account :365/(—50) receivable turnover ratio) =—7.3 Average Payable Period Ratio: (Days in Accounting Period)" Payables Turnover =365/(48.78) Ratio) =7.43 Net Sales to Total Assets: 2(500.000)/(152,000) This is a good ratio approaching the Net Sales)/(Net Total Assets) =3239 industry ratio. The industrial ratio is 48. our :(500,000-230,000)/ company is under by 4.26. It means Net Profit on Sales = Net (500,000) that the company is operating Profit/Net Sales =0,54 inefficientl . The industry ratio is 4.55, our business is 2.78 lower. This ratio =(500.000-230,000)/ shows that the company does not Net Profit to Assets Ratio= (152,000) receive sufficient revenue from the Net Profit)/(Total Assets) =l.776 use of its assets. We have an industry ratio of 1.8. Our business has a higher ratio, =(500,000»230,000)/ which means the business is doing Net Profit to Equity Ratio= (12.500) well. but it's not. so that number Net Profit] Owners Eluit :21,6 could be inaccurate. Assignment; Financial Statements of Business Organizations by Linda Williams in Accounting for Managers by Lumen Learning is licensed under CC BY 4.0 Assignment: Financial Statements of Business Organizations by Linda Williams in Accounting for Managers by Lumen Learning is licensed under CC-BY4.0 ratio appear to be questionable. The net pi'oiit-to—sales ratio and the asset ratio are very small relative to industry ratios. The net earnings ratio for equities appears to be too high in relation to industry ratios. Comments Files (1) Rubric to £1 IE Dashboa... Calendar To Do Notifica... Inbox