Question

Problem 19-1 Use the financial statements of Helfer Sports Inc. to find the information below for Helfer. (Use 365 days a year. Round all answers to 2 declmal places except $ amounts.) Income Statement 2017 Sales $5,630,000 2,936,000 289,400 1,550,000 854,600 Cost of goods sold Depreciation Selling & admin. expensen EBIT Interest expense Taxable income 138,000 716,600 320,300 396,300 Taxes Net ineome Balance Sheet, Year-End 2017 2016 Assets Cash Accounts receivable Inventory Total current assets Fixed assets 48,400 649,000 481,800 $1,179,200 3,060,000 4,239,200 54,000 932,200 648,400 $1,634,600 3,793,000 5,427,600 Total assets Liabilities and Stockholders' Equity Accounts payable Short-term debt Total current liabilities Long-term bonds 336,400 491,000 827,400 2,282,400 $ 3,109,800 623,000 762,200 $1,385,200 3,049,300 $ 4,434,500 313,900 679,200 Total liabilities Common stock Retained earnings Total stockholders' equity $ 313,900 815,500 $1,129,400 993,100 $ Total liabilities and stockholders' equity $ 4,239,200 $5,427,600

please answe the questions from E to K

Answer 1

e)
Asset turnover ratio = Sales / Average total assets
Average total assets = (4,239,200 + 5,427,600)/2 = $4,833,400

Asset turnover ratio = $5,630,000 / $4,833,400 = 1.16

f)
Interest coverage ratio = EBIT / Interest expense
= $854,600 / $138,000
= 6.19

g)
Operating profit margin = EBIT / Sales
= $854,600 / $5,630,000
= 15.18%

h)
Return on equity = Net income / average shareholder's equity
= $396,300 / (1,129,400 + 993,100)/2
= 37.34%

j)
Compounded leverage ratio = (Taxable income / EBIT) X (Average Total assets / Average Equity)
Average shareholder's equity = (1,129,400 + 993,100)/2 = $1,061,250

Compounded leverage ratio = (716,600/854,600) * (4,833,400/1,061,250)
= 3.82

k)

Net cash provided by operating activities = Net Income + Depreciation + decrease in Accounts Receivable + decrease in Inventory - decrease in Accounts Payable
= $396,300 + $289,400 + ($932,200 - $649,000 + ($648,400 - $481,800) - (623,000 - 336,400)
= $848,900.

Net cash provided by operating activities = $848,900.