Question

Use the financial statements of Heifer Sports Inc. to find the information below for Heifer. (Use 365 days a year. Round all answers to 2 decimal places except $ amounts.)
Income Statement 2020
Sales $ 5,760,000
Cost of goods sold 3,045,000
Depreciation 302,500
Selling and administrative expenses 1,620,000
EBIT $ 792,500
Interest expense 174,000
Taxable income $ 618,500
Taxes 281,300
Net income $ 337,200
Balance Sheet, Year-End 2020 2019
Assets
Cash $ 41,100 $ 95,000
Accounts receivable 590,000 1,648,200
Inventory 438,100 1,146,500
Total current assets $ 1,069,200 $ 2,889,700
Fixed assets 2,821,000 6,771,000
Total assets $ 3,890,200 $ 9,660,700
Liabilities and Stockholders' Equity Accounts payable $ 312,400 $ 1,176,000
Short-term debt 505,000 1,445,500
Total current liabilities $ 817,400 $ 2,621,500
Long-term bonds 1,733,800 5,777,400
Total liabilities $ 2,551,200 $ 8,398,900
Common stock $ 313,900 $ 313,900
Retained earnings 1,025,100 947,900
Total stockholders' equity $ 1,339,000 $ 1,261,800
Total liabilities and stockholders' equity $ 3,890,200 $ 9,660,700
a. Inventory turnover ratio
b. Debt/equity ratio in 2020
c. Cash flow from operating activities in 2020
d. Average collection period
e. Asset turnover ratio
f. Interest coverage ratio
g. Operating profit margin
h. Retun on equity
J. Compound leverage ratio
k. Net cash provided by operating activities

Answer 1

Answer:

See calculations below

Explanation:

a. Inventory turn over ratio = 1.92

b. Debt equity ratio = 1.67

c. Cash flow from operating activities in 2020 = $3,269,900

d. Average collection period = 71 days

e. Asset turnover ratio = 1.48

f. Interest coverage ratio = 4.56

g. Operating income = 13.76%

h. Return on equity = 25.18%

j. Compound leverage ratio = 2.27

K. Net cash provided by operating activities = $3,269,900

Please see the whole breakdown in the attached