PArT 1: INTrODuCTION
Challenge Industries Pty Ltd balance sheet at 30 June 2016
Assets Liabilities and equity
Current assets Current liabilities
Cash $ 52,000 Accounts payable $150,000
Marketable securities 60,000 Notes payable?
Accounts receivable 200,000 Accruals 80,000
Inventories _____? Total current liabilities?
Total current assets _____? Long-term debt $425,000
Fixed assets (gross)? Total liabilities?
Less: Accumulated depreciation 240,000 Shareholders’ equity
Net fixed assets _____? Preferred shares?
Total assets _____? Ordinary shares (at par) 150,000
Paid-in capital in excess of par?
Retained earnings 390,000
Total shareholders’ equity?
Total liabilities and
shareholders’ equity__?
Challenge Industries Pty Ltd
Income statement
for the year ended 30 June 2016
Sales revenue $4,800,000
Less: Cost of goods sold _______?
Gross profits _______?
Less: Operating expenses
Sales expense $690,000
General and administrative expense 750,000
Depreciation expense 120,000
Total operating expenses 1,560,000
Earnings before interest and taxes?
Less: Interest expense 35,000
Earnings before taxes _______?
Less: Taxes _______?
Net income (Net profits after taxes) _______?
Less: Preferred dividends 15,000
Earnings available for ordinary shareholders?
Less: Dividends 60,000
Total retained earnings _______?Challenge Industries Pty Ltd
Ratios
for the year ended 30 June 2016
Ratio Value
Total asset turnover 2.00
Gross profit margin 40%
Inventory turnover 10
Current ratio 1.60
Net profit margin 3.75%
Return on ordinary equity 12.5%