The Jimenez Corporation’s

The Jimenez Corporation’s forecasted 2017 financial statements follow, along with some industry average ratios. Calculate Jimenez’s 2017 forecasted ratios, compare them with the industry average data, and comment briefly on Jimenez’s projected strengths and weaknesses

Assets

Cash 72,000

Accounts receivable 439,000

Inventories 894,000

Total current assets 1,405,000

Fixed assets 431,000

Total assets 1,836,000

Liabilities and Equity

Accounts payable 332,000

Notes payable 100,000

Accruals 170,000

Total current liabilities 602,000

Long-term debt 404,290

Common stock $ 575,000

Retained earnings 254,710

Total liabilities and equity$ 1,836,000

 

Jimenez Corporation: Forecasted Income Statement for 2017

Sales $4,290,000

Cost of goods sold (excluding depreciation) 3,580,000

Selling, general, and administrative expenses 370,320

Depreciation 159,000

Earnings before taxes (EBT) 180,680

Taxes (40%) 72,272

Net income 108,408

Jimenez Corporation: Per Share Data for 2017

EPS $ 4.71

Cash dividends per share $ 0.95

P/E ratio5.0

Market price (average) $23.57

Number of shares outstanding 23,000

Industry Ratios

Quick ratio 1.0

Current ratio2.7

Inventory turnover7.0

Days sales outstanding32.0 days

Fixed assets turnover13.0

Total assets turnover2.6

Return on assets 9.1%

Return on equity18.2%

Profit margin on sales3.5%

Debt-to-assets ratio21.0%

Liabilities-to-assets ratio50.0%

P/E ratio6.0

Price/Cash flow ratio3.5

Market/Book ratio3.5

Notes: aBased on year-end balance sheet figures. bCalculation is based on a 365-day year.