Complete the following activities in good form. Use excel or word only. Please do not use any other format such as PDF. Provide all supporting calculations to show how you arrived at your number

Management by Geoffrey
  • Prepare the income statement for 2021 and 2020,Based on your financial statements
  • Complete the following activities in good form. Use excel or word only. Please do not use any other format such as PDF. Provide all supporting calculations to show how you arrived at your number

 

Finance data of Adams Stores, Inc. for the year ending 2021 and 2020

Items 2021 2020
Sales $6,034,000 $3,432,000
Cash 7,282 57,600
Other Expenses 519,988 358,672
Retained Earnings 32,592 203,768
Long-term debt 723,432 323,432
Cost of goods sold 5,528,000 2,864,000
Depreciation 116,960 18,900
Short-term investments 0 0
Gross Fixed Assets 1,202,950 491,000
Interest Expenses 136,012 43,828
Shares outstanding 100,000 100,000
Market Price of stock 2.25 8.50
Accounts Receivable 632,160 351,200
Accounts payable 524,160 145,600
Inventory 1,287,360 715,200
Notes Payable 636,808 200,000
Accumulated Depreciation 263,160 146,200
Accruals 489,600 136,000

Tax Rate40%40%

Stock Price$5.50$7.25

Instructions:

Complete the following activities using the financial information above:

Part 1: Financial Statements

  • Prepare the income statement for 2021 and 2020. Include statement of retained earnings for 2021. The company paid $0.11 dividend per share in 2021.
  • Prepare the balance sheet for 2021 and 2020
  • Prepare Common-Size financial statements for the income statement and balance sheet for 2021 and 2020
  • Prepare Statement of Cash Flows for 2021

Part 2: Financial Statement Analysis

  • Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation need to show the excel formula
  • Comments on each of the ratios by comparing 2021 to 2020 ratios. In your comments, explain the meaning of each of the ratios.
  • Find industry ratios for 2021 similar to the ones you calculated. Compare the industry ratios you found to the ratios you calculated. Based on the industry average, how is Adams Stores, Inc. doing financially?
  • Please organize and group your ratios and calculations as follows:

Current ratio

Quick ratio

Inventory turnover (times)

Accounts receivable turnover (days)

Total asset turnover (times)

Debt ratio

Times interest earned

Gross profit margin

Net profit margin

Return on total assets

Return on equity

P/E ratio

Return on equity using DuPont Analysis

Liquidity ratios
Current Ratio
Quick Ratio
 

 

Asset Management ratios
Inventory Turnover
Accounts Receivable Turnover
Fixed Asset Turnover
Total Asset Turnover
 

Debt Management ratios
Debt Ratio
Times Interest Earned
Profitability ratios
Profit Margin

Return on Assets

Return on Equity (using DuPont)

Market Value ratios

Price-to Earnings Ratio