The following are financial statements of Sheridan
Company.
Sheridan Company Income Statement For the Year Ended December 31, 2022 |
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---|---|---|
Net sales |
$2,210,500 | |
Cost of goods sold |
1,010,000 | |
Selling and administrative expenses |
900,000 | |
Interest expense |
81,000 | |
Income tax expense |
72,500 | |
Net income |
$ 147,000 |
Sheridan Company Balance Sheet December 31, 2022 |
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---|---|---|
Assets |
||
Current assets |
||
Cash |
$ 64,700 | |
Debt investments |
90,000 | |
Accounts receivable (net) |
168,600 | |
Inventory |
242,200 | |
Total current assets |
565,500 | |
Plant assets (net) |
573,500 | |
Total assets |
$ 1,139,000 | |
Liabilities and Stockholders’ Equity |
||
Current liabilities |
||
Accounts payable |
$ 165,000 | |
Income taxes payable |
30,000 | |
Total current liabilities |
195,000 | |
Bonds payable |
215,040 | |
Total liabilities |
410,040 | |
Stockholders’ equity |
||
Common stock |
347,000 | |
Retained earnings |
381,960 | |
Total stockholders’ equity |
728,960 | |
Total liabilities and stockholders’ equity |
$1,139,000 |
Additional information: The net cash provided by operating
activities for 2022 was $193,000. The cash used for capital
expenditures was $91,500. The cash used for dividends was $31,000.
The weighted-average common shares outstanding during the year was
50,000.
(a) | Compute the following values and ratios for 2022. (We provide the results from 2021 for comparative purposes.) (Round Current Ratio and Earnings per share to 2 decimal places, e.g. 15.25 and Debt to assets ratio to 1 decimal place, e.g. 78.9%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) |
(i) | Working capital. (2021: $160,500) | |
(ii) | Current ratio. (2021: 1.65:1) | |
(iii) | Free cash flow. (2021: $48,700) | |
(iv) | Debt to assets ratio. (2021: 31%) | |
(v) | Earnings per share. (2021: $3.15) |
(i) |
Working capital |
$enter a dollar amount | |||
---|---|---|---|---|---|
(ii) |
Current ratio |
enter amount rounded to 2 decimal places | :1 | ||
(iii) |
Free cash flow |
$enter a dollar amount | |||
(iv) |
Debt to assets ratio |
enter percentages rounded to 1 decimal place | % | ||
(v) |
Earnings per share |
$enter a dollar amount rounded to 2 decimal places |
i) | Working Capital | = | Current Assets - Current Liabilities | ||
= | $ 565500 - $ 195000 | ||||
= | $ 3,70,500.00 |
ii) | Current Ration | = | Current Assets / Current Liabilities | |||
= | $ 565500 / $ 195000 | |||||
= | 2.90 |
iii) | Free Cash flow | = | Net cash provided by operating activities - Capital Expenditure - Cash Dividends | ||||
= | $ 193000 - $ 91500 - $ 31000 | ||||||
= | $ 70,500.00 |
iv) | Debt to Asset Ratio | = | Total Debts / Total Assets | ||
= | $ 410040 / $ 1139000 | ||||
= | 36.0 % |
v) | Earning per share | = | Earning available for ESH / Weighted-average common shares outstanding | |||
= | $ 147000 / 50000 | |||||
= | $ 2.94 |
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