Option #2: Happy Hamburger Company
Using the financial statements for Happy Hamburger Company below:
1.Calculate the indicated ratios for Happy Hamburger.
2.Discuss Happy Hamburger’s strengths and weaknesses as revealed by your analysis.
3.Suppose Happy Hamburger doubles its sales as well as its inventories, accounts receivable, and common equity during the year. How would that information affect the validity of your ratio analysis?
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Happy Hamburger Company |
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Income Statement for the year ending December 31, 20XX |
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Sales |
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Cost of goods sold |
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Selling, general and administrative expenses |
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Earnings before interest and taxes (EBIT) |
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Interest expense |
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Earnings before taxes (EBT) |
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Federal and state income taxes (40%) |
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Net Income |
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Hap |
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