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Complete the following questions using Microsoft Word or Excel, as appropriate. Review the grading rubric to confirm you are meeting the assignment requirements.
Below are the balance sheet and income statement for Happy Hamburger Company.
Happy Hamburger Company
Balance Sheet as of December 31, 20XX
Assets
Liabilities and Shareholder Equity
Cash
85,000
Accounts payable
145,000
Accounts Receivable
340,000
Current portion of debt
90,000
Inventories
250,000
Other current liabilities
114,000
Total current assets
675,000
Total current liabilities
349,000
Net fixed assets
360,000
Long-term debt
265,000
Total assets
1,035,000
Total liabilities
614,000
Common equity
421,000
Total liabilities & equity
1,035,000
Happy Hamburger Company
Income Statement for the year ending December 31, 20XX
Sales
1,810,000
Cost of goods sold
1,510,000
Selling, general and administrative expenses
152,000
Earnings before interest and taxes (EBIT)
148,000
Interest expense
26,200
Earnings before taxes (EBT)
121,800
Federal and state income taxes (40%)
48,720
Net Income
73,080
Required:Calculate the following ratios for the company.Explain whether the company is doing better or worse than the industry average for each ratio.
Happy
Industry
Hamburger
Average
Current ratio
1.7
Days sales outstanding (based on 365 day year)
36 days
Inventory turnover
7.3
Fixed asset turnover
12.1
Total asset turnover
3.00
Return on sales
3.20%
Return on assets
3.60%
Return on equity
9.00%
Debt ratio
71%
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