Question

Using the tables (pictured) below, conduct a complete ratio analysis of the Bartlett Company for the years 2018 and 2019. You should assess the firm’s liquidity, activity, debt, and profitability ratios. Highlight any particularly positive or negative developments that you uncover when comparing ratios from 2018 to 2019.

Bartlett Company Income Statements ($000) For the Years Ended December 31 2019 2018 Sales revenue $3,080 $2,590 Less: Cost of goods sold 2,086 1,705 Gross profits $994 $885 Less: Operating expenses Selling expense $90 $112 General and administrative expenses 190 Other operating expenses Depreciation expense 225 Total operating expense $557 $558 Operating profits $437 $327 Less: Interest expense 105 Net profits before taxes $332 $232 Less: Taxes 91 Net profits after taxes $241 $162 Less: Preferred stock dividends Earnings available for common stockholders $231 $152 31 237 95 Earnings per share (EPS) Dividend per share (DPS) $3.03 $1.29 $1.99 $0.75 Calculated by dividing the earnings available for common stockholders by the number of shares of common stock outstanding: 76,262 in 2019 and 76,244 in 2018. Earnings per share in 2019: $231,000 + 76,262 - $3.03; in 2018: $152,000 + 76,244 = $1.99. Calculated by dividing the dollar amount of dividends paid to common stockholders by the number of common stock outstanding. Dividends per share in 2019: $98,000 - 76,262 = $1.29; in 2018: $57,183 + 76,244 - $0.75.

Answer 1

By using the information given in the problem, I have prepared ratio Analysis of Bartlett Company

в H 0 1 Bartlett Company Ratio Analysis Debt Ratio Debt To Equity Ratio = Total Liabilities Total Shareholder Equity MN 2019 1624 1966 0.826 2018 1477 1819 0.812 3 Liquidity Ratios 4 5 Current Ratio - Current Assets Current Liabilities 2019 1218 630 1.933 2018 1003 481 2.085 Profitability Ratios Gross Profit Margin %= Gross Profit Sales 8 9 Working Capital = 10 Current Assets - Current Liabilities 994 3080 32.273 885 2590 34.170 1218-630 588 1003-481 522 11 Net Profit Margin % = Net Income Sales 241 3080 7.825 162 2590 6.255 12 13 Quick Ratio = 14 Cash+Marketable Securities+ Accounts Receivable Current Liabilities 16 708 15 931 630 1.478 481 1.472 17 18 Activity Ratio 19 20 Inventory Turnover = 21 Cost of goods sold 2086 22 Average Inventory 291 23 7.168 24 Average Inventory = ( Beginning Inventory +Ending Inventory)/2 25 = (295+287)/2 291 26