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5. ICS plans on expanding their plant and will fund $2,000,000.
Part of the funding will come from cash, but the balance of $775,000
will be financed. The interest rate will be 5% and ICS plans on
borrowing the funds for 4 years. Prepare a loan amortization
schedule for the 4 years with 5% interest for the $775,000 and
assume making one payment per year. Show the schedule.
6. Using your 2015/2016 Income Statement and Balance Sheet,
add a column for percentage of total. Compute the percentages for
each line item for the financial statements. For the 2015 Income
Statement, what is the percentage of COGS as compared to total
sales? Is this figure reasonable and what is COGS and why is it
important to a company?
7. Financial Ratios provide information to analyze a company’s
performance. Solve the following ratios for 2015 and 2016 using the
Income Statement and Balance sheets you prepared for ICS
Manufacturing.
a. Current Ratio – current assets/current liabilities
b. Quick Ratio – (current assets – inventories)/current liabilities
c. Cash Ratio – cash/current liabilities
d. Debt Ratio – total liabilities/total assets