Question

Problem for Chapter 13 Analyzing Financial Statements Information below comes from the financial statements of Rosson Company. 2018 2017 Revenues: Net Sales Other Revenues.. Total Revenues $299,000 8,000 307,000 $246,000 9,000 255,000 Expenses: Cost of Goods Sold S,G&A Expenses Interest Expense.. Income Tax Expense Total Expenses. Income Before Discontinued Operations Discontinued Operations Gain (net of tax) Net Income.. 172,000 44,000 4,000 31,000 251.000 56,000 138,000 40,000 4,500 25,400 207,900 47,100 9,000 $ 65,000 $ 47,100 Assets Current Assets: $ 7,500 $ 12,500 1,500 47,500 145,000 2,500 209,000 157,000 Cash Marketable Securities. 1,000 50,000 150,000 5,000 213,500 147,000 30,500 $391,000 Accounts Receivable Inventories. Prepaid Expenses. Total Current Assets Plant and Equipment (net). Intangibles. $366,000 Total Assets. Liabilities and Stockholders' Equity Liabilities: Current Liabilities: S 79,500 22,500 102,000 100,000 202,000 $ 58,000 25,000 83,000 90,000 173,000 Accounts Payable Other Accrued Liabilities Total Current Liabilities Bonds Payable Total Liabilities Stockholders' Equity: Common Stock ($5 par) Paid-In Capital in Excess of Par of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 130,000 20,000 130,000 20,000 68,000 218,000 14,000 164,000 $391,000 $366,000 Common stock market price at year-end $14.00 $8.55 Dividend payments amounted to $11,000 in 2018 and $5,000 in 2017.

Answer 1

YEAR CURRENT ASSET 2018 2017 CURRENT LIABLITIES 83000 102000 = WORKING CAPITAL 130500 107000 213500 209000 RATIO CURRENT RATIO 2018 2017 CURRENTASSET/CURRENT LIABLITIES | 2.572 2.049019608 QUICK RATIO 2018 2017 RATIO NOTE-1 2018 2017 209000- 213500 145000- QUICK ASSET=CURRENT ASSET-INVENTORY-PREPAID EXPENSE (150000-5000 2500 58500 61500 QUICK ASSET/CURRENT LIABLTIES 0.705 0.602941176 RATIO ACCOUNT RECIVEABLE TURNOVER RATIO NET SALES/AVERAGE DEBTORS 2018 5.98 2017 5.18 NOTE-2 QUICK LIABLITIES=CURRENT LIBALITES-BILLS PAYABLE) NET CREDIT SALES ACCOUNTS RECIVEVALES 83000 102000 299000 246000 50000 47500 5.98 5.178947 RATIO 2018 2017 NOTE-3 365/ACCOUNTS RECIEVEBLE TURNOVER RATIO AVERAGE COLLECTION PERIOD 365/ACCOUNTS RECIEVEBLE TURNOVER RATIO 61.04 70.46332046 IN DAYS 2018 172000 2017 138000 RATIO 2018 2017 NOTE-4 COST OF GOODS SOLD INVENTORY TURNOVER RATIO COST OF GOODS SOLD/AVERAGE INVENTORY 1.147 0.951724138 INVENTORY 150000 145000 1.146666667 0.951724

RATIO AVERAGE DAYS TO SALE INVENTORIES ITR/365 2018 0.003 2017 0.002 SOLVENCY RATIO DEBT ASSET (TOTAL ASSET) RATIO DEBT TO ASSET DEBT/ASSET DEBT TO EQUITY DEBT/EQUITY 2018 0.23 2018 0.794 2017 27 2017 1.23 RATIO DEBT (TOTAL DEBT) EQUITY DEBT/EQUITY 2018 2017 90000 100000 391000 366000 0.230179028 0.273224 2018 2017| 173000202000 218000 164000 0.793577982 1.231707 2018 2017 40001 4500 78000 51500 19.5| 11.44444 2018 2017| 218000 164000 391000 366000 0.557544757 0.448087 RATIO 2017 TIMES INTERET EARNED EBIT/INT ON DEBT 2018 19.5 INTEREST EBITEEAT+TAX+INTEREST 11.44 RATIO EQUITY RATIO EQUITY/TOTAL ASSET 2018 0.56 2017 0.45 EQUITY TOTAL ASSET PROFITABLITY RATIO RATIO PROFIT MARGIN NET SALES-COGS/NET SALES 2018 21.73 2017 19.1 NET SALES NET PROFIT NET SALES-COGS 2018 2017 299000 246000 65000 47100 21.73913043 19.14634

RATIO RETURN ON ASSET NET INCOME/AVERAGE TOTAL ASSET 2018 16.62 2017 12.87 NET INCOME TOTAL ASSET 65000| 47100 391000 366000 16.62404092 12.86885 2018 2017 65000 47100 218000 164000 29.81651376 28.71951 RATIO RETURN ON ASSET NET INCOME /EQUITY 2018 21.82 2017 28.71 NET INCOME EQUITY