Chapter 3

Problems 3,7,13,14,16
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Chapter 3
Question 3
Input area:
Accounts receivable 421,865 $
Credit sales 2,873,150
Output area:
Receivables turnover = 6.81
Days' sales in receivables = 53.59
The average collection period for an outstanding
accounts receivable was 53.59 days.
Chapter 3
Question 7
Input area:
Equity multiplier
Total asset turnover
Profit margin
Output area:
Return on equity = 0.00%
Input area:
2004 2005
Cash
Accounts receivable
Inventory
Net plant and equipment
Accounts payable
Notes payable
Long-term debt
Common stock and paid in surplus
Retained earnings
Output area:
2004 #13 2005 #13 #14
Assets
Current assets
Cash - $ #DIV/0! - $ #DIV/0! #DIV/0!
Accounts receivable - #DIV/0! 0 #DIV/0! #DIV/0!
Inventory - #DIV/0! 0 #DIV/0! #DIV/0!
Total - $ #DIV/0! - $ #DIV/0! #DIV/0!
Fixed assets
Net plant and equipment - #DIV/0! - #DIV/0! #DIV/0!
Total assets - $ #DIV/0! - $ #DIV/0! #DIV/0!
Liabilities and owners' equity
Current liabilities
Accounts payable - $ #DIV/0! - $ #DIV/0! #DIV/0!
Notes payable - #DIV/0! 0 #DIV/0! #DIV/0!
Total - $ #DIV/0! - $ #DIV/0! #DIV/0!
Long-term debt - #DIV/0! 0 #DIV/0! #DIV/0!
Owners' equity
Common stock and paid-in surplus - $ #DIV/0! - $ #DIV/0! #DIV/0!
Accumulated retained earnings - #DIV/0! 0 #DIV/0! #DIV/0!
Total - $ #DIV/0! - $ #DIV/0! #DIV/0!
Total liabilities and owners' equity - $ #DIV/0! - $ #DIV/0! #DIV/0!
Questions 13-14
Chapter 3
Chapter 3
Input area:
2004 2005
Cash - $ - $
Accounts receivable - -
Inventory - -
Net plant and equipment - -
Accounts payable - -
Notes payable - -
Long-term debt - -
Common stock and paid in surplus - -
Retained earnings - -
Output area:
Question 16
2004 Sources/Uses 2005
Assets
Current assets
Cash - $ - S - $
Accounts receivable - - S 0
Inventory - - S 0
Total - $ - S - $
Fixed assets
Net plant and equipment - - S -
Total assets - $ - S - $
Liabilities and owners' equity
Current liabilities
Accounts payable - $ - U - $
Notes payable - - U 0
Total - $ - U - $
Long-term debt - - U 0
Owners' equity
Common stock and paid-in surplus - $ 0 - $
Accumulated retained earnings - - U 0
Total - $ - U - $
Total liabilities and owners' equity - $ - U - $
The firm used - $ in cash to acquire new assets. It raised this amount of cash
by increasing liabilities and owners' equity by the same amount. In particular, the
needed frunds were raised entirely by internal financing (on a net basis), out of the
additions to retained earnings.
2003 2004
a. Current ratio #DIV/0! #DIV/0!
b. Quick ratio #DIV/0! #DIV/0!
c. Cash ratio #DIV/0! #DIV/0!
d. NWC to total assets ratio #DIV/0! #DIV/0!
e. Debt-equity #DIV/0! #DIV/0!
Equity mulitplier #DIV/0! #DIV/0!
f. Total debt ratio #DIV/0! #DIV/0!
Long-term debt ratio #DIV/0! #DIV/0!