Group Problem Set 1: This problem Set is based on materials covered in modules 1 and 2. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review Modules 1 and 2 materials thoroughly.<\/p>\n

Finance date of Adams Stores, Inc. for the year ending 2016 and 2017.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n Items<\/strong><\/p>\n<\/td>\n	\n 2016<\/strong><\/p>\n<\/td>\n	\n 2017<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n Sales<\/p>\n<\/td>\n	\n $3,432,000 <\/p>\n<\/td>\n	\n $5,834,400 <\/p>\n<\/td>\n<\/tr>\n
\n Cash<\/p>\n<\/td>\n	\n 9,000<\/p>\n<\/td>\n	\n 7,282<\/p>\n<\/td>\n<\/tr>\n
\n Other Expenses<\/p>\n<\/td>\n	\n 340,000<\/p>\n<\/td>\n	\n 720,000<\/p>\n<\/td>\n<\/tr>\n
\n Retained Earnings<\/p>\n<\/td>\n	\n 203,768<\/p>\n<\/td>\n	\n 97,632<\/p>\n<\/td>\n<\/tr>\n
\n Long-term debt<\/p>\n<\/td>\n	\n 323,432<\/p>\n<\/td>\n	\n 1,000,000<\/p>\n<\/td>\n<\/tr>\n
\n Cost of goods sold<\/p>\n<\/td>\n	\n 2,864,000<\/p>\n<\/td>\n	\n 4,980,000<\/p>\n<\/td>\n<\/tr>\n
\n Depreciation<\/p>\n<\/td>\n	\n 18,900<\/p>\n<\/td>\n	\n 116,960<\/p>\n<\/td>\n<\/tr>\n
\n Short-term investments<\/p>\n<\/td>\n	\n 48,600<\/p>\n<\/td>\n	\n 20,000<\/p>\n<\/td>\n<\/tr>\n
\n Fixed Assets<\/p>\n<\/td>\n	\n 491,000<\/p>\n<\/td>\n	\n 1,202,950<\/p>\n<\/td>\n<\/tr>\n
\n Interest Expenses<\/p>\n<\/td>\n	\n 62,500<\/p>\n<\/td>\n	\n 176,000<\/p>\n<\/td>\n<\/tr>\n
\n Shares outstanding (par value = $46.00)<\/p>\n<\/td>\n	\n 100,000<\/p>\n<\/td>\n	\n 100,000<\/p>\n<\/td>\n<\/tr>\n
\n Market Price of stock<\/p>\n<\/td>\n	\n 8.50<\/p>\n<\/td>\n	\n 6<\/p>\n<\/td>\n<\/tr>\n
\n Accounts Receivable<\/p>\n<\/td>\n	\n 351,200<\/p>\n<\/td>\n	\n 632,160<\/p>\n<\/td>\n<\/tr>\n
\n Accounts payable<\/p>\n<\/td>\n	\n 145,600<\/p>\n<\/td>\n	\n 324,000<\/p>\n<\/td>\n<\/tr>\n
\n Inventory<\/p>\n<\/td>\n	\n 715,200<\/p>\n<\/td>\n	\n 1,287,360<\/p>\n<\/td>\n<\/tr>\n
\n Notes Payable<\/p>\n<\/td>\n	\n 200,000<\/p>\n<\/td>\n	\n 720,000<\/p>\n<\/td>\n<\/tr>\n
\n Accumulated Depreciation<\/p>\n<\/td>\n	\n 146,200<\/p>\n<\/td>\n	\n 263,160<\/p>\n<\/td>\n<\/tr>\n
\n Accruals<\/p>\n<\/td>\n	\n 136,000<\/p>\n<\/td>\n	\n 284,960<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Tax Rate40%40%<\/p>\n Instructions:<\/p>\n complete the following activities using the financial information above:<\/p>\n Part 1:<\/strong> Financial Statements<\/p>\n \n Prepare the income statement for 2016 and 2017. Include statement of retained earnings for 2017. The company paid $11,000 dividend in 2017.<\/li>\n Prepare the balance sheet for 2016 and 2017 <\/li>\n Prepare Common-Size financial statements of income statement and balance sheet.<\/li>\n Prepare Statement of Cash Flows. <\/li>\n<\/ul>\n Part 2:<\/strong> Financial Statement Analysis<\/p>\n \n 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<\/li>\n Comments on the ratios by comparing 2016 to 2017 ratios. <\/li>\n Assume Adams Stores, Inc. is a retail company similar to WalMart, Myers, or Target. Compare 2017 ratios to the industry average. Please note that Adams Stores, Inc. is not a real company. To find comparable industry ratios, you need to search for industry ratios for retail. See information on Moodle for instructions on how to find industry ratios. Based on the industry average, how is Adams Stores, Inc. doing financially? <\/li>\n<\/ul>\n Current ratio<\/p>\n Quick ratio<\/p>\n Inventory turnover (times)<\/p>\n Average collection period (days)<\/p>\n Total asset turnover (times)<\/p>\n Debt ratio<\/p>\n Times interest earned<\/p>\n Gross profit margin<\/p>\n Net profit margin<\/p>\n Return on total assets<\/p>\n Return on equity<\/p>\n P\/E ratio<\/p>\n Return on equity using DuPont Analysis<\/p>\n Part 3:<\/strong> Break-even, Financial and Operating Leverages<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n Johnson Products, Inc.<\/strong><\/p>\n<\/td>\n<\/tr>\n \n Income Statement<\/strong><\/p>\n<\/td>\n<\/tr>\n \n For the Year Ended December 31, 2018<\/strong><\/p>\n<\/td>\n<\/tr>\n \n Sales (40,000 bags at $50 each)…………………………….. <\/p>\n<\/td>\n \n $2,000,000<\/p>\n<\/td>\n<\/tr>\n \n Less: Variable costs (40,000 bags at $25)……………. <\/p>\n<\/td>\n \n 1,000,000<\/p>\n<\/td>\n<\/tr>\n \n Fixed costs…………………………………………………….. <\/p>\n<\/td>\n \n 600,000<\/u><\/p>\n<\/td>\n<\/tr>\n \n Earnings before interest and taxes ………………………… <\/p>\n<\/td>\n \n 400,000<\/p>\n<\/td>\n<\/tr>\n \n Interest expense………………………………………………….. <\/p>\n<\/td>\n \n 120,000<\/u><\/p>\n<\/td>\n<\/tr>\n \n Earnings before taxes …………………………………………. <\/p>\n<\/td>\n \n 280,000<\/p>\n<\/td>\n<\/tr>\n \n Income tax expense (20%)……………………………………. <\/p>\n<\/td>\n \n 56,000<\/u><\/p>\n<\/td>\n<\/tr>\n \n Net income…………………………………………………………. <\/p>\n<\/td>\n \n $ 224,000<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Based on the information above, calculate (show all calculations and responses in good form):<\/p>\n \n Break-even in units (in dollars and units). Explain what your numbers mean. As a manager, how would you use the numbers in financial planning?<\/li>\n What is the degree of financial leverage? Explain what your number mean. As a manager, how would you use the numbers in financial planning?<\/li>\n What is the degree of operating leverage? Explain what your number mean. As a manager, how would you use the numbers in financial planning?<\/li>\n<\/ul>\n Specific Instructions:<\/strong><\/p>\n \n Due: Last day of this Module.<\/li>\n Include only the names of your group members who participated in this assignment when you submit. <\/li>\n Submit only one copy per group.<\/li>\n You may use Excel or Word. Please DO NOT use any other format such PDF, etc.<\/li>\n<\/ul>\n Side Note: Please note that this is not the type of assignment where the assignment is divided and each student completes the part that is assigned. Each person in your group need participate fully in the completion of each part of the assignment.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":" Group Problem Set 1: This problem Set is based on materials covered in modules 1 and 2. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review Modules 1 and 2 materials thoroughly. Finance date of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/141323"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=141323"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/141323\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=141323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=141323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=141323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}