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    6. Following are financial statements for the Genatron Manufacturing Corporation for 2012 and 2011. GENATRON MANUFACTURING CORPORATION BALANCE SHEET 2012 2011 ASSETS Cash $40,000 $50,000 Accts. receivable 260,000 200,000 Inventory 500,000 450,000 Total current assets 800,000 700,000 Fixed assets, net 400,000 300,000 Total assets $1,200,000 $1,000,000 LIABILITIES AND EQUITY Accts. Payable $170,000 $130,000 Bank loan 90,000 90,000 Accruals 70,000 50,000 Total current liabilities 330,000 270,000 Long-term debt, 12% 400,000 300,000 Common stock, $10 par 300,000 300,000 Capital surplus 50,000 50,000 Retained earnings 120,000 80,000 Total liabilities & equity $1,200,000 $1,000,000 INCOME STATEMENT 2012 2011 Net sales $1,500,000 $1,300,000 Cost of goods sold 900,000 780,000 INCOME STATEMENT 2012 2011 Gross profit 600,000 520,000 Expenses: general and administrative 150,000 150,000 Marketing 150,000 130,000 Depreciation 53,000 40,000 Interest 57,000 45,000 Earnings before taxes 190,000 155,000 Income taxes 76,000 62,000 Net income $114,000 $93,000 a. Apply Du Pont analysis to both the 2012 and 2011 financial statements’ data. b. Explain how financial performance differed between 2012 and 2011. 7. This problem uses the financial statements for the Genatron Manufacturing Corporation for the years 2012 and 2011 from Problem 6. a. Calculate Genatron’s dollar amount of net working capital in each year. b. Calculate the current ratio and the acid-test ratio in each year. c. Calculate the average collection period and the inventoryturnover ratio in each year. d. What changes in the management of Genatron’s current assets seem to have occurred between the two years? 8. Genatron Manufacturing expects its sales to increase by 10 percent in 2013. Estimate the firm’s external financing needs by using the percent-of-sales method for the 2012 data. Assume that no excess capacity exists and that one-half of the 2012 net income will be retained in the business.
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