FINANCIAL RATIOS: (Compute For Year 2020 Only, Answers Must Be Rounded Off in Two Decimal Places) (5 Points)
FINANCIAL RATIOS: (Compute For Year 2020 Only, Answers Must Be Rounded Off in Two Decimal Places) (5 Points)
FINANCIAL RATIOS: (Compute For Year 2020 Only, Answers Must Be Rounded Off in Two Decimal Places) (5 Points)
1. FINANCIAL RATIOS: (Compute for year 2020 only, answers must be rounded off in
two decimal places) (5 points)
A. Current Ratio
B. Asset Turnover Ratio
C. Average Collection Period
D. Inventory Turnover Ratio
E. Days Inventories
G. A projected sale for 2021 is expected to increase by 10% from 2020 sales level.
H. The following financial statement accounts are expected to vary with sales based on the
2020 financial statements:
I. Cost of Sales
II. Cash
III. Trade accounts receivable
IV. Inventories
V. Other current assets
VI. Trade accounts payable
Variable operating expense is 7.5% of sales. Depreciation is 10% of the gross beginning
balance of PPE. As of December 31, 2020, the gross balance of PPE is P17,000,000.
For January 2021, P3,000,000 new PPE will be acquired. It is the policy of the company
that PPE acquired in the first half of the year will be depreciated for one full year.
I. As of December 31, 2020, there are two long-term loans. Both have annual interest rate
of 10%
• First loan will mature on June 30, 2021 and the remaining principal balance to
be paid on June 30, 2021 is P1,000,000
• Second loan amounting to 3,000,000 which was incurred on December 31,
2020 is paid at the rate of 500,000 principal balance every June 30 and
December 31
• New loans of PHP4,000,000 will be incurred on December 31, 2021 payable at the
rate of PHP500,000 every June 30 and December 31. Annual interest rate is
expected at 10%.
J. Income tax rate is 30% of the income before taxes. 75% of the income tax expense will
be paid in 2021 while the balance will be paid in 2022.
K. Cash dividend of P3,000,000 will be paid on 2021. Other noncurrent assets and other
liabilities will remain unchanged.
Y Company
Statement of Profit and Loss
For the year Ending December 31, 2017-2020
Y Company
Statement of Financial Position
December 31, 2017-2020
2020 2019 2018 2017
Assets
Current Assets
Cash 1,050,000 998,000 850,000 745,000
Receivable 3,000,000 2,000,000 1,000,000 990,000
Inventories 4,900,000 4,450,000 3,950,000 3,750,000
Other Current Assets 1,045,550 700,000 600,000 500,000
Total Current Assets 9,995,550 8,148,000 6,400,000 5,985,000
Property, plant, and equipment, net 15,000,000 14,300,000 10,500,000 9,000,000
Other Non-current Assets 70,000 62,000 50,000 47,000
Total Non-current Assets 15,070,000 14,362,000 10,550,000 9,047,000
Total Assets 25,065,550 22,510,000 16,950,000 15,032,000