Chiang Kai Shek College

ASSIGNMENT
FINANCIAL STATEMENT ANALYSIS
PROBLEM 1
Complete the balance sheet for Patapatapatapon, Inc. based on the following financial data.
Round-off all your answers to nearest dollar.
Balance Sheet
Patapatapatapon, Inc.
December 31, 2016
Assets
Cash
Marketable securities
Accounts receivable
Inventories
Total current assets
Gross fixed assets
Less: Accumulated depreciation
Net fixed assets
Total assets

P 8,005
(1)
(2)
(3)
P 159,565
(4)
P50,000
(5)
(6)

Liabilities and Stockholders Equity

Accounts payable
P28,800
Notes payable
(7)
Accruals
P18,800
Total current liabilities
(8)
Long-term debts
(9)
Total liabilities
(10)
Stockholders equity
Preferred stock
2,451
Common stock at par
30,000
Paid-in capital in excess of par
6,400
Retained earnings
90,800
Total stockholders equity
(11)
Total liabilities and stockholders equity
(12)

Key Financial Data (2016)

a. Sales totaled P720,000.
b. The gross profit margin was 38.7 percent.
c. Inventory turned 6 times.
d. There are 360 days in a year.
e. The average collection period was 31 days.
f.
The current ratio was 2.35.
g. The total asset turnover was 2.81.
h. The debt ratio was 49.4 percent.

PROBLEM 2

1. A firm with sales of P1,000,000, net

profits after taxes of P30,000, total
assets of P2,000,000, and total liabilities of P1,200,000 has a return on equity of?

2. A firm had year end 2015 and 2016 retained earnings balances of P670,000 and P560,000,
respectively. The firm paid P10,000 in dividends in 2016. The firms net profit(loss) after
taxes in 2016 was?

3. Brewster Company's debt-to-equity ratio is 0.8. Current liabilities total P100,000 and long
term liabilities total P200,000. Brewster Company's total assets must be?
4. Karver Company has total assets of P180,000 and total liabilities of P130,000. The
company's debt-to-equity ratio is?
5. The times interest earned ratio of Whiting Company is 4.0. The interest expense for the year
is P15,000, and the company's tax rate is 30%. Whiting Company's after-tax net income
must be?
6. Last year Jar Company had a net income of P290,000, income tax expense of P66,000, and
interest expense of P20,000. The company's times interest earned was?
7. Eachus Corporation has provided the following data:
This Year
Accounts receivable........
P135,000
Inventory.........................
P136,000
Sales on account.............
P698,500
Cost of goods sold..........
P429,000

Last Year
P119,000
P155,000

The accounts receivable turnover for this year is?

8. Harold Company, a retailer, had cost of goods sold of P259,900 last year. The beginning
inventory balance was P20,000 and the ending inventory balance was P26,000. The
company's inventory turnover was?

PROBLEM 3
Financial Statement of Cathay Co. for the year 2016:
Income Statement
Cathay Co.
For the Year Ended December 31, 2016
Sales Revenue
P100,000
Less: Cost of Goods Sold
87,000
Gross Profits
P13,000
Less: Operating Expenses
11,000
Operating Profits
P2,000
Less: Interest Expense
500
Net Profits Before Taxes
P1,500
Less: Taxes (40%)
600
Net Profits After Taxes
P900

Balance Sheet
Cathay Co.
December 31, 2016
Assets
Cash
Accounts Receivable
Inventories
Total Current Assets
Gross Fixed Assets
Less: Accumulated Depreciation
Net Fixed Assets
Total Assets

P 1,000
8,900
4,350
P14,250
P35,000
13,250
21,750
P36,000

Liabilities & Stockholders Equity

Accounts Payable
Accruals
Total Current Liabilities
Long-term Debt
Total Liabilities
Common Stock (par P10, FMV P15/sh.)
Retained Earnings
Total Stockholders Equity
Total Liabilities & Stockholders Equity

Compute for the following:

1. Current ratio
2. Working capital
3. Quick asset ratio
4. Inventory Turnover
5. Average holding period
6. Receivable Turnover
7. Average collection period
8. Total Asset Turnover
9. Debt Ratio
10. Debt to Equity Ratio
11. Times interest earned
12. Gross Profit Margin
13. Net Profit Margin
14. Return on Asset
15. Return on Equity
16. Return on Sales
17. Earnings per share
18. Book value per share
19. Price-earnings ratio
20. Market to book ratio

PROBLEM 4-A
December 31, 2016 and 2015

P 9,000
6,675
P15,675
4,125
P19,800
1,000
15,200
P16,200
P36,000

Assets
Current assets:
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Total current assets
Property and equipment:
Land
Buildings and equipment, net
Total property and equipment
Total assets

2016

Increase
(Decrease)

2015

P 12,000
(2)
81,000
3,420
(5)

P (1)
40,000
100,000
(4)
173,800

(62.50%)
50.00%
(3)
90.00%
(10.00%)

(6)
121,800
(8)
P 323,895

(6)
81,200
126,875
P 300,675

0.00%
(7)
32.00%
7.72%

PROBLEM 4-B
December 31, 2016 and 2015
Liabilities
Current liabilities:
Accounts payable
Non-current liabilities:
Notes payable
Total liabilities:

2016

2015
P 16,000

(30.00%)

60,000
71,200

(10)
96,000

(25.00%)
(11)

(12)
148,500
248,500
P 319,700

80,000
(13)
200,000
P 296,000

25.00%
23.75%
(14)
8.01%

Shareholders' equity
Share capital
Retained earnings
Total shareholders' equity:
Total liabilities and shareholders' equity:

Increase
(Decrease)

(9)

PROBLEM 4-C
Income Statement

Sales revenue
Less: Cost of goods sold
Gross profits
Less: Operating expense
Operating profits
Less: Interest expense
Net profits before taxes
Less: Taxes (30%)
Net profits after taxes

2016
P1,250,000

(16)

Percentag
e

100.00%
60.00%
(15)
11.20%
(17)

(18)

(19)
(20)
P 238,000

Chiang Kai Shek College

19.04%

NAME:______________________________________

Problem 1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Problem 2
1.
2.
3.
4.
5.
6.
7.
8.

Problem 3
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

Problem 4-A
1.
2.
3.
4.
5.
6.
7.
8.
Problem 4-B
9.
10.
11.
12.
13.
14.
Problem 4-C
15.
16.
17.
18.
19.
20.