Financial statements for Franklin Company follow.
FRANKLIN COMPANY | |||||||
Balance Sheets As of December 31 |
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2019 | 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash | $ | 19,500 | $ | 15,500 | |||
Marketable securities | 20,700 | 6,700 | |||||
Accounts receivable (net) | 48,000 | 40,000 | |||||
Inventories | 133,000 | 141,000 | |||||
Prepaid items | 27,000 | 12,000 | |||||
Total current assets | 248,200 | 215,200 | |||||
Investments | 22,000 | 15,000 | |||||
Plant (net) | 290,000 | 275,000 | |||||
Land | 33,000 | 28,000 | |||||
Total assets | $ | 593,200 | $ | 533,200 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities | |||||||
Current liabilities | |||||||
Notes payable | $ | 31,200 | $ | 18,200 | |||
Accounts payable | 133,800 | 120,000 | |||||
Salaries payable | 22,000 | 16,000 | |||||
Total current liabilities | 187,000 | 154,200 | |||||
Noncurrent liabilities | |||||||
Bonds payable | 110,000 | 110,000 | |||||
Other | 31,000 | 26,000 | |||||
Total noncurrent liabilities | 141,000 | 136,000 | |||||
Total liabilities | 328,000 | 290,200 | |||||
Stockholders’ equity | |||||||
Preferred stock, (par value $10, 5% cumulative, non-participating; 7,000 shares authorized and issued) | 70,000 | 70,000 | |||||
Common stock (no par; 50,000 shares authorized; 10,000 shares issued) | 70,000 | 70,000 | |||||
Retained earnings | 125,200 | 103,000 | |||||
Total stockholders’ equity | 265,200 | 243,000 | |||||
Total liabilities and stockholders’ equity | $ | 593,200 | $ | 533,200 | |||
FRANKLIN COMPANY | |||||||
Statements of Income and Retained Earnings For the Years Ended December 31 |
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2019 | 2018 | ||||||
Revenues | |||||||
Sales (net) | $ | 300,000 | $ | 280,000 | |||
Other revenues | 9,400 | 6,400 | |||||
Total revenues | 309,400 | 286,400 | |||||
Expenses | |||||||
Cost of goods sold | 150,000 | 124,000 | |||||
Selling, general, and administrative | 62,000 | 57,000 | |||||
Interest expense | 10,100 | 9,300 | |||||
Income tax expense | 58,000 | 57,000 | |||||
Total expenses | 280,100 | 247,300 | |||||
Net earnings (net income) | 29,300 | 39,100 | |||||
Retained earnings, January 1 | 103,000 | 71,000 | |||||
Less: Preferred stock dividends | 3,500 | 3,500 | |||||
Common stock dividends | 3,600 | 3,600 | |||||
Retained earnings, December 31 | $ | 125,200 | $ | 103,000 | |||
Required
Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.
2019 | 2018 | ||||
a. | Working capital | not attempted | not attempted | ||
b. | Current ratio | not attempted | not attempted | ||
c. | Quick ratio | not attempted | not attempted | ||
d. | Receivables turnover | not attempted | times | not attempted | times |
e. | Average days to collect accounts receivable | not attempted | days | not attempted | days |
f. | Inventory turnover | not attempted | times | not attempted | times |
g. | Average days to sell inventory | not attempted | days | not attempted | days |
h. | Debt to assets ratio | not attempted | % | not attempted | % |
i. | Debt to equity ratio | not attempted | not attempted | ||
j. | Number of times interest earned | not attempted | times | not attempted | times |
k. | Plant assets to long-term debt | not attempted | not attempted | ||
l. | Net margin | not attempted | % | not attempted | % |
m. | Asset turnover | not attempted | not attempted | ||
n. | Return on investment | not attempted | % | not attempted | % |
o. | Return on equity | not attempted | % | not attempted | % |
p. | Earnings per share | not attempted | per share | not attempted | per share |
q. | Book value per share | not attempted | per share | not attempted | per share |
r. | Price-earnings ratio | not attempted | not attempted | ||
s. | Dividend yield | not attempted | % | not attempted | % |
2019 | 2018 | |||
a. | Working Capital | Total Current Assets - Total Current Liabilities | $ 61,200 | $ 61,000 |
b. | Current ratio | Total Current Assets / Total Current Liabilities | 1.33 | 1.40 |
c. | Quick Ratio | ( Cash + Marketable Securities + Prepaid Expenses ) / Total Current Liabilities | 0.47 | 0.40 |
d. | Receivables Turnover | Net Sales / Accounts Receivable | 6.25 times | 7 times |
e. | Average Days to Collect Accounts Receivable | 365 / Receivables Turnover | 58 days | 52 days |
f. | Inventory Turnover | Cost of Goods Sold / Inventory | 1.13 times | 0.88 times |
g. | Average Days to Sell Inventory | 365 / Inventory Turnover | 323 days | 415 days |
h. | Debt to Assets Ratio | Total Liabilities / Total Assets | 55 % | 54 % |
i. | Debt to Equity Ratio | Total Liabilities / Total Stockholders Equity | 1.24 | 1.19 |
j. | Times Interest Earned | Operating Income / Interest Expense | 8.71 times | 10.65 times |
k. | Plant Assets to Long Term Debt | Plant ( Net ) / Total Noncurrent Liabilities | 2.06 | 2.02 |
l. | Net Margin | Net Income / Total Revenues | 9.47 % | 13.65 % |
m. | Asset Turnover | Total Revenues / Total Assets | 0.52 | 0.54 |
Financial statements for Franklin Company follow. FRANKLIN COMPANY Balance Sheets As of December 31 2019 2018...
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