Ian Manufacturing - Financial Analysis

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Table of Contents Financial Statements 2 Part A 3 Part B 7 Part C 8 Financial Statements Ian Manufacturing company was organized five years ago and manufactures toys. The most recent three year's balance sheets and income statements are reproduced below: Ian Manufacturing Company Balance sheets June 30, Year 5, year 4 and year 3 Year 5 Year 4 Year 3 Assets Cash $12,000 $15,000 $16,000 Accounts receivable net 183,000 80,000 60,000 Inventory 142,000 97,000 52,000 Other current assets 5,000 6,000 4,000 Plant and Equipment, net 160,000 110,000 70,000 Total asset $502,000 $308,000 $202,000 Liabilities and Equity $147,800 $50,400 $22,000 Accounts payable 30,000 14,400 28,000 Federal income tax payable 120,000 73,000 22,400 Common stock,$5 Par value 110,000 110,000 80,000 Retained earning 94,200 60,200 49,600 Total Liabilities and Equity $502,000 $308,000 $202,000 IAN Manufacturing Company Condensed Income Statement For years ended June 30, Year 5, Year 4, Year 4 Year 5 Year 4 Year 3 Net sales $1,684,000 $1,250,000 1,050,000 Cost of Goods sold (927,000) (810,000) (512,000) Gross profit 757,000 440,000 538,000 Marketing and administrative costs (670,000) (396,700) (467,760) Operating Income 87,000 433,000 70,240 Interest Cost (12,000) (7,300) (2,240) Income before Income Tax 75,000 36,000 68,000 Income Tax (30,000) (14,400) (28,000) Net Income 45,000 21,600 40,000 IAN Manufacturing Company Statement of retained Earnings For the year ended June 30, Year 5 and Year 4 Year 5 Year 4 Balance, Beginning 60,200 49,600 Add: Net Income 45,000 21,600 Subtotal 105,200 71,200 Deduct : Dividends Paid 11,000 11,000 Balance, Ending 94,200 60,200 Part A Compute the following measures for both years 4 and 5 1. Working capital 2. Current ratio 3. Acid-test ratio 4. Accounts

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