What is the Cash Flow Statement? What does it tell us about an organization?

 

 

 

  1. What is the Balance Sheet? What does it tell us about an organization?
  1. What is the Income Statement? What does it tell us about an organization?
  1. What is the Cash Flow Statement? What does it tell us about an organization?
  1. Using the data from the following Financial Statements, compute:
    1. Current ratio:
    2. Quick ratio:
    3. Profit margin on sales:
    4. Return on total assets:
    5. Return on equity:

 

Balance Sheet Ajax Corp. Acme, Inc.
Cash $2,255,000 $67,000
Accounts Receivable $565,000 $1,110,000
Inventory $1,332,000 $2,441,000
Total Current Assets $4,152,000 $3,618,000
Net Property, Plant and Equipment $369,000 $1,327,000
Other Assets $211,000 $597,000
Total Assets $4,732,000 $5,542,000
Accounts Payable $27,000 $168,000
Notes Payable Sort Term $426,000 $819,000
Other Short Term Liabilities $2,000 $56,000
Total Current Liabilities $455,000 $1,043,000
Notes Payable Long Term $1,222,000 $943,000
Total Liabilities $1,677,000 $1,986,000
Stockholders’ Equity $3,055,000 $3,556,000
Total Liabilities and Stockholders’ Equity $4,732,000 $5,542,000

 

 

 

 

 

Income Statement Ajax Corp. Acme, Inc.
Sales $32,752,000 $4,835,000
Cost of Sales $28,273,000 $2,966,000
Gross Profit $4,479,000 $1,869,000
Selling, General and Administrative Expenses $2,541,000 $912,000
Income before Interest and Taxes $1,937,000 $957,000
Interest Expense $129,000 $88,000
Income before Taxes $1,808,000 $869,000
Taxes $723,000 $280,000
Net Income $1,085,000 $589,000

 

 

 

  1. What does each of these financial ratios tell us about a company?
    1. Current ratio
    3. Quick ratio:
    5. Profit margin on sales:
    7. Return on total assets:
    9. Return on equity:

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