Balance sheet Assets Cash Rece.
Refer to the following financial statements and answer the questions:
Answer the following questions:
- Determine which items varied in constant proportion to sales between 20×6 and 20×7.
- Determine the rate of growth in sales that was achieved from year 20×6 to 20×7.
- What was the firm’s return on equity for 20×7? Can you calculate for 20×6?
- What was the firm’s external (additional) funding requirement determined to be for 20x? How was the funding obtained? (hint: compare the changes in debts and equities).
- Attachment 1
- Attachment 2
Balance sheet Assets CashReceivablesInventory Property, plant and equipment Total assetsLiabilities Payables Short—term debt (10 % interest)Long—term debt (7% interest) Sh areholders’ equity Common stockRetained earningsTotal liabilities and equity 20×6 $300,000 $200,000 $700,000$1,800,000$3,000,000 $300,000$500,000$800,000 $1,100,000$300,000$3,000,000 20×7 $375,000 $250,000 $875,000$2,250,000$3,750,000 $375,000$989,882$900,000 $1,100,000$385,118$3,750,000
