Economics of the Firm. Material base of the firm. Financial statement.

Summarizing financial data

Reading: Economics of the Firm. Part 1. – Anna A. Dokukina, 2006 (pp.43-58);
Organizations and the Business Environment. – David J. Campbell, 2001 (pp. 140-151)

Financial statements
You have received two financial statements of the company:
1. The Balance Sheet
THE STATIONERY STORE
DECEMBER 20XX
ASSETS
Current Assets
Cash $15 000
Accounts receivable $36 000
Less allowance for bad debts (1 500)
34 500
Inventory (at cost) 46 500
Total current assets $96 000
Fixed Assets
Furniture and fixtures 33 000
Delivery van 30 000
63 000
Loss accumulated depreciation (3 000)
Total fixed assets 60 000
Total Assets $156 000
LIABILITIES and CAPITAL
Current Liabilities
Accounts payable $27 000
Notes payable (due within 1 year) 12 000
Accrued liabilities 3 000
Total current liabilities $42 000
Long-Term Liabilities
Notes payable (due after 1 year) 12 000
Total long-term liabilities $54 000
Capital
Owner’s capital, January 1, 20XX 99 000
Net income for year 45 000
Less proprietor’s drawings (42 000)
Undistributed income 3 000
Total capital, December 31, 20XX 102 000
Total Liabilities and Capital $156 000
2. The Income Statement
THE STATIONERY STORE
FOR THE ENDING DECEMBER, 20XX
Percent
Net Sales $300 000 100%

Cost of Goods Sold

Inventory, January,1 $46 500
Purchases $153 300
Less cash discount (2 400)
150 900
Available for sale 197 400
Les inventory, December 31 (47 400)
Cost of goods sold 150 000 50
Gross Margin 150 000 50

Expenses
Accounting and Legal 3 000
Advertising 7 500
Depreciation 3 000
Insurance 3 500
Interest 2 500
Miscellaneous 7 500
Payroll 36 000
Rent 25 500
Repairs 1 500
Suppliers 4 500
Travel 6 000
Utilities 4 500
Total expense 105 000 35
Net Income $45 000 15
Additional information
The Stationery Store offers 30 days credit.
Economics of the Firm. Material base of the firm. Financial statement. Summarizing financial data
Reading: Economics of the Firm. Part 1. – Anna A. Dokukina, 2006 (pp.43-58);
Organizations and the Business Environment. – David J. Campbell, 2001 (pp. 140-151)

Interrupt financial data and draw up the Financial Ratio Checklist.

Financial ratio checklist

Names____Fedina Yana____
__Borisova Maria____
Group № _____5203_______

Analyze your results and think how the indicators can be changed under different hypothetical circumstances.
Make your conclusions and formulate the recommendations here

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