1. $502,640 + 120,000-169,056=$453,584- 17050= $436,534
2. If Congress change the tax laws Berndt’s, the reported profit would decrease and the net cash flow would most likely remain the same.
3. Current Ratios (Current Assets / Current Liabilities): $2,680,112 / $1,039,800 = $2.577 /Ratio= 2:6:1
Quick Ratios (Cash + Marketable Securities +Accounts Receivable)/ Current Liabilities: $14,000 + $71,632 + $878,000/$1,039,800= $0.926/ Ratio= 0:9:1
The company’s liquidity position in 2013 had a decrease in working capital and liquidity because of no assets compared to year 2012. The company is more in debt, they were worst in their industry average. The company has a low liquidity in 2013.
4. Inventory turnover (Cost of goods/Average Total Assets / 2): $5,800,000/ $1287360 + 1716,480/ 2= 3.86
Days sales outstanding (Accounts Payable/ Cost of Sales/360): $878,000/7035,600 *365= 45.5
Fixed assets turnover (Cost of sales/ Net fixed assets)= $7035,600 / (939,790+836,840)/2= 7.9
Total assets turnover (Sales/Total Assets)= $7,035,600 / (2886.592+3516,952)/2= 2.2 5. Debt ratio: Total liabilities/Total Assets= $1539,800 / 3516952= 0.44
Liabilities to assets ratio (Total Liabilities / Total Assets)= $1039800 / 3516952= $0.295
Times-interest earned (EBIT/ Interest Charges)= $502,640 / $80,000= 6.283
EBITDA coverage ratios (EBITDA/Interest Payments)= (502,640 +120,000+40,000)/ (80,000 +40,000+500,000)= 1.1
I conclude from these ratios are that debt and liabilities are equal and it does they will be able to pay off any debt accumulated.
6. Profit margin (Net profit/revenue) = 100=253,584/7,035,600*100=3.6%
Basic earning power (EBIT/Total assets)= $502,640 / $3,516,952 *100 = 14.3%
Return of assets (Net Income/Total assets) $253,584 / $3,516,952= $0.072
Return on equity (Net Income/Shareholder’s Equity) = $253,584 / (2886,592 +3516,952)/2 *100=7.9%
The company seems to be profitability and are making money
7.