Financial Forensics End Term: 24 December 2023, Set FDB1 (September 2023 term)

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $10 million
Accounts receivable: $5 million
Inventory: $3 million
Total assets: $18 million

Liabilities
Accounts payable: $2 million
Short-term debt: $3 million
Long-term debt: $5 million
Total liabilities: $10 million

Shareholder's equity: $8 million

Income statement:
Revenue: $12 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $3 million

Current Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $10 million
Accounts receivable: $5 million
Inventory: $3 million
Total assets: $18 million

Liabilities
Accounts payable: $2 million
Short-term debt: $3 million
Long-term debt: $5 million
Total liabilities: $10 million

Shareholder's equity: $8 million

Income statement:
Revenue: $12 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $3 million

Quick Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $10 million
Accounts receivable: $5 million
Inventory: $3 million
Total assets: $18 million

Liabilities
Accounts payable: $2 million
Short-term debt: $3 million
Long-term debt: $5 million
Total liabilities: $10 million

Shareholder's equity: $8 million

Income statement:
Revenue: $12 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $3 million

Inventory turnover ratio