Question.3062 - Income Statement 2008 & 2007 1/1/2008-12/31/2008Revenue $3,249,580.53 Direct Expenses Salaries & Wages $487,437.08 Vehicle Maintenance $64,991.61 Fuel $20,449.80 Traps & Chemicals $1,378,203.63 $1,951,082.12 Indirect Expenses Rent $39,338.17 Licenses $2,480.00 Insurance $103,613.43 Administrative Salaries $150,250.00 Commissions $16,991.61 Payroll Taxes $72,014.66 Legal Expenses $12,000.00 Accounting Fees $7,000.00 Office Supplies $7,800.00 Utilities $10,806.40 Advertising Expenses $116,000.00 Bad Debts $122,138.64 Depreciation Expense $94,925.75 Misc. Expense $50,000.00 $805,358.66 Total Expenses $2,756,440.78 Net Income $493,139.751/1/2007-12/31/2007Revenue $3,893,027.78 Direct Expenses Salaries& Wages $583,954.17 Traps & Chemicals $1,651,100.81 Fuel $19,177.32 Vehicle Maintenance $77,860.56 $2,332,092.85 Indirect Expenses Rent $38,192.40 Licenses $2,480.00 Interest Expense $0.00 Insurance $103,613.43 Admin. Salaries $133,500.00 Commissions $52,860.49 Payroll Taxes $84,734.61 Legal Expenses $12,000.00 Accounting Fees $7,000.00 Office Supplies $7,800.00 Utilities $9,824.00 Advertising Expenses $81,510.00 Bad Debts $103,493.45 Depreciation Expense $94,925.75 Misc. Expenses $60,000.00 $791,934.13 $3,124,026.98 Net Income $769,000.80Balance Sheet 2008 & 2007 12/31/2008Current Assets Cash $818,440.68 Accounts Receivable $812,395.13 Inventory $205,934.30 Total Current Assets $1,836,770.12 Fixed Assets Vehicles $268,750.00 Tools $110,953.00 Less Accumulated Depreciation ($284,431.95) Total Fixed Assets $95,271.05 Total Assets $1,932,041.17 Liabilities Current Liabilities Accrued Payroll Taxes $36,007.33 Accounts Payable $270,798.38 Total Current Liabilities $306,805.71 Long-Term Liabilities $0.00 Total Liabilities $306,805.71 Stockholders’ Equity Common Stock (1,000,000 authorized shares at $1 par) $70,000.00 Retained Earnings $1,062,095.71 Net Income $493,139.75 Total Stockholders’ Equity $1,625,235.46 Total Liabilities & Stockholders’ Equity $1,932,041.1712/31/2007Current Assets Cash $291,703.44 Accounts Receivable $811,047.45 Inventory $205,934.30 Total Current Assets $1,308,685.20 Fixed Assets Vehicles $268,750.00 Tools $110,953.00 Less Accumulated Depreciation ($189,506.20) Total Fixed Assets $190,196.80 Total Assets $1,498,882.00Liabilities Current Liabilities Accrued Payroll Taxes $42,367.31 Accounts Payable $324,418.98 Total Current Liabilities $366,786.29 Long?Term Liabilities Auto Loans $0.00 Total Long?Term Liabilities $0.00 Total Liabilities $366,786.29 Stockholders’ Equity Common Stock (1,000,000 authorized shares at $1 par) $70,000.00 Retained Earnings $293,094.91 Net Income $769,000.80 Total Stockholders’ Equity $1,132,095.71 Total Liabilities & Stockholders’ Equity $1,498,882.00Instructions: Using the 2007 & 2008 Income Statement and Balance Sheet provided, calculate the following… Liquidity ratios ? Current ratio ? Acid-test, or quick, ratio ? Receivables turnover ? Inventory turnover Profitability ratios ? Asset turnover ? Profit margin ? Return on assets ? Return on common stockholders’ equity Solvency ratios ? Debt to total assets ? Times interest earned Please be sure to also do the following… 1. Show your calculations for each ratio 2. Create a horizontal and vertical analysis for the balance sheet and the income statement 3. Write a 350- to 700-word memo to the CEO of your selected organization (Berry’s Bug Busters) in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions: a) What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company? b) Which users may be interested in each type of ratio? c) What does the collected data reveal about eh performance and position of the company

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