Preparing a Balance Sheet and Ratio Analysis

Given the following data:

2001

2000

Cash

$ 30,000

$ 40,000

Retained earnings

175,000

225,000

Current liabilities

17,000

16,000

Invested capital

600,000

600,000

Accounts receivable

27,500

38,000

Inventories

45,000

47,000

Fixed assets, net

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Required

a. Rearrange these data into classified balance sheets.

b. Find the missing Fixed Assets amounts necessary to balance each balance sheet.

c. Evaluate the firm’s liquidity, using the ratios described in this chapter.

d. Calculate the firm’s asset management and debt management ratios. Evaluate the results.