Question

"Exercise 9-13 The condensed financial statements of Ness Company for the years 2016 and 2017 are presented below. NESS COMPANY Balance Sheets December 31 (in thousands) 017 2016 $330 . Current assets hand cashewivalents Accounts receivable (net) Inventory 10 Total current assets Property, plant, and equipment (net) 1.390 410 1,300 30 Intang bles and others asets 530 510 12.340 32,210 $820 5790 Long term Stockholders equity common Total abilities and 1.040 1,040 requity 12.10 $2,210 Income Statements For the Year Ended December 31 (in thousands) 2017 2016 $3,000 $,460 Cost of goods sold Selling & administrative expen Inbart expen Total costs and expenses Income before income taxes Income tax expense Compute the following ratios for 2017 and 2016. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%) (a) Current ratio. () Inventory turnover. (Inventory on December 31, 2015, was $340.) - Profit margin. Return on assets. (Assets on December 31, 2015, were $1,900.) (4) Return on common stockholders' equity. (Equity on December 31, 2015, was $900.) Debt to assets ratio. e Times interest earned. 2017 Current Inventory turnover Pronari Return on con holders uity. Debt tot Timers med Question Attempts

Answer 1

Ness Company
Income Statement	2017	2016
Sales	3,800.00	3,460.00
Total Sales	3,800.00	3,460.00
Expenses
Cost of goods sold	970.00	890.00
Gross Margin	2,830.00	2,570.00
Selling and administrative expense	2,400.00	2,330.00
Earning before Interest & Taxes	430.00	240.00
Interest Expense	10.00	20.00
Net Income before taxes	420.00	220.00
Income tax	168.00	88.00
Net Income	252.00	132.00
Balance Sheet
Assets
Current Assets
Cash	330.00	360.00
Accounts Receivable	470.00	400.00
Inventory	460.00	390.00
Prepaid Expense	130.00	160.00
Total Current Assets	1,390.00	1,310.00
Property Plant & Equipment (Net)	410.00	380.00
Investments	10.00	10.00
Intangible and other assets	530.00	510.00
Total Assets	2,340.00	2,210.00
Liabilities & Stockholders' Equity
Liabilities
Current Liabilities	820.00	790.00
Long Term Liabilities	480.00	380.00
Total Liabilities	1,300.00	1,170.00
Stockholders' Equity
Common Stock	1,040.00	1,040.00
Total Stockholders' Equity	1,040.00	1,040.00
Total Liabilities & Stockholders' Equity	2,340.00	2,210.00

Ans a	2017	2016
Current Ratio	1.70	1.66
Current Assets/Current Liabilities
Ans b
Inventory Turnover	2.11	2.28
Cost of goods sold/Inventory
Ans c
Profit margin ratio	6.63%	3.82%
Net Income/Net Sales
Ans d
Return on Assets	10.77%	5.97%
Net Income / Total Assets
Ans e
Return on Equity	24.23%	12.69%
Net Income/Total Stock Holders Equity
Ans f
Debt to Assets Ratio	0.56	0.53
Total Liabilities /Total Assets
Ans g
Times Interest Earned	43.00	12.00
Earning before Interest & Taxes/Interest Expense