Homework answers / question archive /  Analysis of Financial Statements (Financial Ratios) M & G Industries Balance Sheet For December 31, 2020 and 2021 2020 2021 Cash $ 9,000 $ 500 Accounts receivable 12,500 16,000 Inventories 29

 Analysis of Financial Statements (Financial Ratios) M & G Industries Balance Sheet For December 31, 2020 and 2021 2020 2021 Cash $ 9,000 $ 500 Accounts receivable 12,500 16,000 Inventories 29

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 Analysis of Financial Statements (Financial Ratios) M & G Industries Balance Sheet For December 31, 2020 and 2021 2020 2021 Cash $ 9,000 $ 500 Accounts receivable 12,500 16,000 Inventories 29.000 45,500 Total current assets $ 50,500 $ 62,000 Land 20.000 26,000 Buildings and equipment 70,000 100,000 Less: allowance for depreciation (28,000) (38,000) Total fixed assets $ 62,000 $ 88,000 Total assets $112.500 $150,000 Accounts Payable $ 10,500 $ 22,000 Short-term bank notes 17,000 47,000 Total current liabilities $ 27,500 $ 69,000 Long-term debt 28.750 22,950 Common stock 31,500 31,500 Retained earnings 24,750 26,550 Total debt and equity $112,500 $150,000 M & G Industries Income Statement For the Years Ended December 31, 2020 and 2021 2020 2021 $125,000 75.000 $ 50,000 $160,000 96,000 $ 64,000 Sales (all credit) Cost of goods sold Gross profit Operating expenses Fixed cash operating expenses Variable operating expenses Depreciation Total operating expenses Earnings before interest and taxes Interest expense Earnings before taxes Tazes Net income $ 21,000 12,500 4,500 $ 38,000 $ 12,000 3,000 59,000 4,500 4,500 $ 21,000 16.000 10.000 $ 47,000 $ 17,000 6,100 $ 10,900 5,450 $ 5,450
2020 Based on the preceeding statements, complete the following table: M & G Industries Ratio Analysis Industry Adsua! Actual Averages 2021 Current ratio 1.80 Acid-test ratio .70 Average collection period 37.00 Inventory turnover 2.50 Debt ratio 58% Times interest camned 3.80 Total asset tumover 1.14 Fixed asset turnover 1.40 Return on equity 9.5% Instructions: I. Resolve the ratios listed on table a for each year (2020 & 2021): a. For each ratio includes the formula with math computes (2020 & 2021) b. .Fill M&G Industries Ratio Analysis Table A. (2020 & 2021) Perform the following Analysis: a. Explain each ratio results for 2021 only. b. Compare each ratio performance with the previous year results (compare 2021 results with 2020 results) c. Compare each Ratio results for 2021 with their respective Industry average. III. Base on the previous results, evaluate and explain the Company financial position using the following questions: 1. How liquid is the firm? 2. Is management generating adequate operating profits on the firm's assets? 3. How is the firm financing its assets? 4. Are the owners (stockholders) receiving an adequate return on their investment?