Table 1 Balance Sheet for Brookstone Feed and Grain Company

31-Dec-15
(a)

Assets

(b)

Current Assets:

(c)

Cash/checking

(d)

Accounts Receivable

(e)

Inventory

(f)

Prepaid Expenses

(g)

Other

(h)

Total Current Assets

(i)

Fixed Assets:

(j)

Land

(k)

Building

600,000

(l)

Less: Accumulated
Depreciation

150,000

(m)

Equipment

(n)

Less: Accumulated
Depreciation

(o)

Total Fixed Assets

(p)

Other Assets

(q)

Total Assets

(r)

Liabilities

(s)

Current Liabilities:

(aa)

Accounts Payable

(bb)

Notes Payable

(cc)

Accrued Expenses

(dd)

Advances

(ee)

Total Current
Liabilities

1,300,000
520,000

(ff)

Long-Term
Liabilities:

(gg)

Mortgages

(hh)

Other

(ii)

Total Long-Term
Liabilities

(jj)

Total Liabilities

(kk)

Owners Equity

(ll)

Owner-invested
Capital:

(mm)

Common Stock

(nn)

Retained Earnings

(oo)

Total Owners
Equity

(pp)

Total Liabilities and

Owners Equity

stone Feed and Grain Company

ec-15

$175,000
1,600,000
2,500,000
7,000
5,000
$4,287,000

1,150,000

450,000

780,000

2,380,000
10,000
$6,667,000

800,000
1,000,000
35,000
27,000
1,862,000

1000000
150000
1150000
3,012,000

1,885,000
1,780,000
3,665,000
6,677,000

Table 2 Income Statement for Brookstone Feed and Grain Company, Y

(a) Sales:
Grain and Soybeans
$8,146,000
Seed
670,500
Fertilizer and Chemicals
2,213,000
Feed
1,810,000
Miscellaneous Supplies
402,300
Service Income
268,200
Gross Sales
13,510,000
Less Returns, Allowances, and Discounts
100,000
13,410,000
Net Sales
(b)Cost of Goods Sold:
Grain and Soybeans
7,556,900
Seed
511,650
Fertilizer and Chemicals
1,791,420
Feed
1,534,380
Miscellaneous Supplies
330,650
Service Expense
0
Total Cost of Goods Sold
11,725,000
(c) Gross Profit (Margin)
1,685,000
(d) Operating Expenses:
(e) Salaries and Benefits
210,000
(f) Full-time Wages
166,000
(g) Part-time Wages
10,400
(h) Commissions
42,740
(i) Depreciation
290,000
(j) Maintenance and Repairs
58,000
(k) Utilities
56,990
(l) Insurance
71,200
(m) Office Supplies/Expense
26,820
(n) Advertising/Promotion
6,400
(o) Gas and Oil
48,600
(p) Delivery and Freight
156,710
(q) Rent
6,300
(r) Taxes, Licenses, Fees
48,160
(s) Miscellaneous
3,300
(t) Payroll Tax
10,900
(u) Bad Debt
3,290
(v) Total Operating Expenses
1,215,810
(w) Net Operating Income
469,190

(x) Other Revenue

(y) Interest Expense
(z) Net Income Before Taxes
(aa) Taxes
(bb) Net Income After Taxes

18,200
230,840
256,550
59,900
196,650

d Grain Company, Year Ending December 31, 2015

100.00%

87.43%
12.57%
1.57%
1.24%
0.08%
0.32%
2.16%
0.43%
0.42%
0.53%
0.20%
0.05%
0.36%
1.17%
0.05%
0.36%
0.02%
0.08%
0.02%
9.07%
3.50%

0.14%
1.72%
1.91%
0.45%
1.47%

Table.3 Statement of Owners Equity for Brookstone Feed and Grain

Year Ending December 31, 2015
Owners Equity,
December 31, 2014
Retained Earnings,
December 31, 2014
Net Profit After Taxes,
2015
Dividends
Withdrawals

$1,680,000
$196,650
0
96,650

Increase (Decrease) in
Retained Earnings

$100,000

Retained Earnings,
December 31, 2015

$1,780,000

Common Stock,
December 31, 2014

$1,885,000

+ Increases

Decreases

Increase (Decrease) in
Common Stock
Common Stock,
December 31, 2015
Owners Equity,
December 31, 2015

$0
$1,885,000

Feed and Grain

$3,565,000

$3,665,000

Table. 4 Statement of Cash Flows for Brookstone Feed and Grain Company, Year
Ending December 31, 2015

Cash Flow from Operating

Activities

Net Profit after Taxes

+ Depreciation
Increase in Accounts
Receivable
Decrease in Accounts
Payable
Decrease in Accrued
Expenses
Net Cash from Operating
Activities

$196,650
290,000
20,000
15,000
15,000
$436,650

Cash Flow from Investing

Activities

Cash Proceeds from Sale of

Equipment

$10,000

Cash Purchase of Equipment

336,650

Net Cash from Investing

Activities

($326,650)

Cash Flow from Financing

Activities

+ Increase in Notes Payable

Decrease in Mortgages
Net Cash from Financing
Activities

$45,000
75,000
($30,000)

Net Change in Cash

$80,000

Beginning Cash Balance

$95,000

Ending Cash Balance

$175,000

Profitablity Ratios
1) Earnings on sales (EOS)
The higher the better
2) Retrurn on Sales (ROS)

3) Return on equity (ROE)

The higher the better

4) Return on assets (ROA)
The higher the better
5) Gross margin ratio
The higher the better
Liquidity Ratios
1) Net working capital (NWC)
The higher the better
2) Current ration (CR)
The higher the better

3) Quick ratio (QR)

The higher the better
4) Leverage ratio
The lower the better

Solvency
1) debt to equity Ratio (D/E)
The smaller the better

Net operating income/ net sales

Focuses on operating efficiency and pricing policies
Each one dollar sales generates about 0.03 dollars of operating income
Net income after taxes/ net sales
Focuses on operating efiiciency, pricing, on the after tax base
each dollar sale generates 0.01 dollars of the after tax return
Net income after taxes/ owners equity
determines the return on owner investment
owner uses it to pick investment opprotunities
Each dollar the owner invested brings in 0.05 dollars as net income after taxes
(Net income after taxes + interest expense)/ total assets
Focuses on net income generated from total assets
Each dollar of the total assets generates 0.06 dollars of net income after taxes.
Gross/ net sales
Shows how much the business has left from each dollar of net sales to pay operating
Each dollar of net sales generates about 0.12 cents to cover operating expenses plus

Total current assets - total current liabilities

Shows how much is available to meet short term obligations

Total current assets/ total current liabilities

Indicates a firms ability to meet its current obligations
The firm has $2.3 of current asset to cover one dollar of the total current liability
goal is 2
(Total current asset - inventory)/ Total current liabilities
Indicates a firms ability to meet its current obligations
Goal0.8-1
Total asset/ Owners equity
Indicates the companies debt used to finance the firm
Each one dollar in the firm is financed by $1.83 of borrowed dollar

Total liabilities/ owner's equity

Indicates relationships of owner's equity to the total liability of the firm
Goal is under 1
Each one dollar of owners equity is used to finance about $0.82 of owners debt

0.0350

0.0147

0.0537

$0.06

0.1257

$2,425,000

$2.30

0.9597

1.8191

$0.82