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Dave CPA
Dave CPA, Accountant
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Hello, I am in need of assistance with the solvency

This answer was rated:

Hello,

I am in need of assistance with the solvency ratio portion of this assignment only, I need the figures and calculations and to for work to be shown on how those totals were accumulated.

Access the information contained in your selected organization’s balance sheet and income statement to calculate the following:

· Liquidity ratios

o Current ratio
o Acid-test, or quick, ratio
o Receivables turnover
o Inventory turnover

· Profitability ratios

o Asset turnover
o Profit margin
o Return on assets
o Return on common stockholders’ equity

· Solvency ratios

o Debt to total assets
o Times interest earned

Here are the balance sheets and income statements.


Huffman Trucking

Balance Sheet

(Unaudited)

December 31st
2011 2010
(In Thousands)

Assets
Current Assets
Cash & Cash Equivalents $89,664 $58,003
Accounts Receivable 51,869 81,557
Prepaid Expenses & Supplies 6,267 5,529
Total Current Assets $147,800 $145,089

Carrier Operating Property (at cost) $85,306 $81,461
Less: Allowance for Depreciation (69,536) (67,119)
Net Carrier Operating Property $15,770 $14,342

Assets of Discontinued Operations 7,516 8,739
Goodwill (net) 49,852 49,852
Other Assets 46,327 37,306
Total Assets $267,265 $255,328


Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable $40,843 $45,381
Salaries & Wages 37,299 33,014
Current Portion of Long-Term Debt 1,752 1,343
Freight & Casualty Claims Payable 10,389 9,697
Total Current Liabilities $90,283 $89,435

Long-Term Liabilities
Accrued Pension & Post-Retirement Health Care $64,058 $58,672
Long-Term Debt 7,307 6,562
Total Long-Term Liabilities $71,365 $65,234

Shareholders' Equity
Common Stock ($1.00 par value Authorized: 20,000,000 shares) $3.882 $3.882
Treasury Shares (1.952) (1.952)
Retained Earnings 105,615 100,657
Total Shareholders' Equity $105,617 $100,659

Total Liabilities and Shareholders' Equity $267,265 $255,328


Huffman Trucking

Statement of Income

(Unaudited)

December 31st
2011 2010
(In Thousands)

Revenue $1,109,295 $969,240

Operating Expenses
Salaries, Wages & Benefits $406,191 $367,993
Fuel Expense 318,737 258,904
Operating Supplies and Expenses 117,670 105,875
Purchased Transportation 138,140 114,250
Operating Taxes & Licenses 19,033 17,753
Insurance & Claims 11,995 12,493
Provision for Depreciation 3,009 2,773
Total Operating Expenses $1,014,775 $880,041

Operating Income form Continuing Operations $94,520 $89,199

Interest Expense $466 $768
Tax Expense 34,887 32,923
Net Income $59,167 $55,508
Hello,

Welcome to Just Answer. Attached is a link that will have the answers. I would like to note that you have no inventory on your balance sheet, therefor you can't calculate the Inventory ratio. Also the accounts receivable ratio requires an average balance and because you don't have 2009 balance sheet, the 2010 ratio can't be calculated.

Let me know if you have any questions before you rate my answer. A positive rating is what I strive for. Regards Dave

https://app.box.com/s/bzuxzyrlgbgkhtilipmv
Customer: replied 3 years ago.


Hello,


 


Thank you for your assistance, is there a way for the work to be shown or at the least explained to show how those answers were calculated? That was also a part of my question.

If you look at the formula in excel you can see what part of the income statement of balance sheet was used by the balance. Example would be current ration, where I took the current assets and divided by current liabilities. This is the same way for all of the ratios. Let me know if you need further assistance or if you want me to put the definition of each ratio next to the answer. Regards Dave
Customer: replied 3 years ago.

Hello,


 


If you could put the definition of each ratio next to the answer that would be most helpful to me so that I have a better understanding.


 


Thank you,

Hello,

I added the definition in the link below. Please let me know if you need anything else before you rate my answer. Regards Dave

https://app.box.com/shared/mfr2xo3tm7
Customer: replied 3 years ago.


The link does not have any files in it.

Sorry about that. This will work.

https://app.box.com/s/qv7qjge4cef80e7epfcu
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