Please Post a 150-300 Word Response to the Following Discussion Question by Clicking on Reply. Solve Problem P15-7 on Page 741 of Your Reading Material. the Name of This Company Is Cotte Corporation. You Are Required to
COTTE CORPORATION | | Income Statement | | For the Year Ended December 31, 2009 | | | | | Sales | $11,000,000 | | Cost of goods sold | $5,184,000 | | Gross profit | $5,816,000 | | Operating expenses | $1,665,000 | | Income from operations | $4,151,000 | | Other expenses and losses Interest Expense | $1,996,000 | | Income before income taxes | $2,155,000 | | Income tax expense | $560,000 | | Net income | $1,595,000 | | | | | | | | | | | COTTE CORPORATION | Balance Sheets | December 31 | | | | Assets | 2009 | 2008 | Current assets | | | Cash | $450,000 | $375,000 | Accounts Receivable (net) | $1,100,000 | $950,000 | Inventory | $1,080,000 | $1,720,000 | Total Current Assets | $2,630,000 | $3,045,000 | Plant Assets (net) | $4,620,000 | $3,955,000 | Total Assets | $7,250,000 | $7,000,000 | | | | Liabilities and Stockholders’ Equity | | | Current liabilities | $876,667 | $825,000 | Long-term notes payable | $2,800,000 | $2,800,000 | Total Liabilities | $3,676,667 | $3,625,000 | Common stock, $1 par | $3,000,000 | $3,000,000 | Retained earnings | $400,000 | $375,000 | Total stockholders’ equity | $3,400,000 | $3,375,000 | Total liabilities and stockholders’ equity | $7,076,667 | $7,000,000 |
Computation:
Profit margin = Net income / Net sales
0.145 = Net income/$11000000
Net income = $1595000 Current ratio = Current assets/Current liabilities
3 = $2630000/current liabilities
Current liabilities = $876667 Receivables turnover= Net credit sales/Average net receivables
10 = $11000000/Average net receivables
Average net receivables =$ 1100000 Inventory turnover = Cost of goods sold/Average inventory
4.8 = Cost of goods sold/$1080000
Cost of goods sold = $5184000 Return on assets = Net income/Average assets
0.22 = 1595000/Average assets
Average assets = $7250000
Yes I would invest in this
Computation:
Profit margin = Net income / Net sales
0.145 = Net income/$11000000
Net income = $1595000 Current ratio = Current assets/Current liabilities
3 = $2630000/current liabilities
Current liabilities = $876667 Receivables turnover= Net credit sales/Average net receivables
10 = $11000000/Average net receivables
Average net receivables =$ 1100000 Inventory turnover = Cost of goods sold/Average inventory
4.8 = Cost of goods sold/$1080000
Cost of goods sold = $5184000 Return on assets = Net income/Average assets
0.22 = 1595000/Average assets
Average assets = $7250000
Yes I would invest in this