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Problem Solving Activity

Delta Corporation's balance sheet for 2023 and 2024 shows total assets increasing from ₱980,000 to ₱1,100,000, with current assets also rising. The income statement indicates revenue growth from ₱1,000,000 in 2023 to ₱1,200,000 in 2024, alongside an increase in net income from ₱112,000 to ₱154,000. Key financial ratios and analyses are requested, including current ratio, inventory turnover, and operating margin.

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3 views3 pages

Problem Solving Activity

Delta Corporation's balance sheet for 2023 and 2024 shows total assets increasing from ₱980,000 to ₱1,100,000, with current assets also rising. The income statement indicates revenue growth from ₱1,000,000 in 2023 to ₱1,200,000 in 2024, alongside an increase in net income from ₱112,000 to ₱154,000. Key financial ratios and analyses are requested, including current ratio, inventory turnover, and operating margin.

Uploaded by

jemar.ampilanon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Delta Corporation

Balance Sheet
For the Years Ended December 31,2023 and 2024
Assets 2023 (₱) 2024 (₱)
Current Assets
Cash ? 120,000
Accounts Receivable 120,000 150,000
Inventory 150,000 ?
Prepaid Expenses 40,000 50,000
Total Current Assets 410,000 500,000
Non-Current Assets
Property, Plant & Equipment 650,000 700,000
Less: Accumulated Depreciation (80,000) (100,000)
Net PP&E 570,000 600,000
Total Assets 980,000 1,100,000

Liabilities & Equity 2023 (₱) 2024 (₱)


Current Liabilities
Accounts Payable 70,000 90,000
Notes Payable (Short-term) 50,000 60,000
Accrued Expenses 40,000 50,000
Total Current Liabilities ? 200,000
Long-Term Liabilities
Bonds Payable 250,000 ?
Total Liabilities 410,000 500,000
Equity
Common Stock 400,000 400,000
Retained Earnings 170,000 200,000
Total Equity 570,000 600,000
Total Liabilities & Equity 980,000 1,100,000
Delta Corporation
Income Statement
For the Years Ended December 31,2023 and 2024
Account 2023 (₱) 2024 (₱)
Revenue (Sales) 1,000,000 1,200,000
Cost of Goods Sold (COGS) 500,000 600,000
Gross Profit 500,000 600,000
Operating Expenses 280,000 300,000
Depreciation Expense 40,000 50,000
Operating Income (EBIT) ? 250,000
Interest Expense 20,000 30,000
Earnings Before Tax (EBT) 160,000 220,000
Income Tax Expense (30%) 48,000 ?
Net Income 112,000 154,000

1. What is the amount of cash in the balance sheet for the year 2023?
2. What is the amount of inventory in the balance sheet for the year 2024?
3. What is the total current liabilities for the year 2023?
4. What is the amount of bonds payable for the year 2024?
5. How much is the tax expense of Delta Corp. for the year 2024?
6. What is the total Operating Income (EBIT) for the year 2023?
7. Using vertical analysis, if Revenue (Sales) is the base (100%), what percentage of
Revenue is the Operating Expense?
8. In horizontal analysis, Revenue (Sales) increased from 2023 to 2024. By how many
percent did it increase compared to the previous year?
9. In horizontal analysis, how much did Retained Earnings increase or decrease in
percentage terms from 2023 to 2024?
10. Using the balance sheet, compute the Current Ratio of the company.
11. Compute the company’s Inventory Turnover Ratio
12. Compute the Fixed Assets Turnover Ratio
13. Compute the Operating Margin by dividing EBIT by Sales.
14. Compute the Total Debt to Total Capital Ratio to determine how much of the
company’s capital comes from debt.

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