Question

Do It! Review 9-3 |x Your answer is incorrect. Try again. The condensed financial statements of Blossom Company for the years 2016 and 2017 are presented as follows. (Amounts in thousands.) BLOSSOM COMPANY Balance Sheets December 31 2017 2016 $360 570 450 Current assets Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Total current assets Investments Property, plant, and equipment (net) Intangibles and other assets 160 $330 640 520 120 1,610 180 420 530 1,540 180 380 510 $2,740 $2,610 Total assets Current liabilities Long-term liabilities Stockholders' equity-common Total liabilities and stockholders' equity $960 440 $1,070 470 1,200 $2,740 1,210 $2,610

Answer 1

	2017		2016
	Calculation	Answer	Calculation	Answer
(a) Current ratio ( Total current assets / Total current liabilities )	(1610/1070)	1.50:1	(1540/960)	1.60:1
(b) Inventory turnover ( Cost of goods sold / Average inventory )	(1125/485)	2.32 times	(1060/400)	2.65 times
(c) Profit margin ratio ( Net income / Sales revenue )	(217/3860)	5.6%	(77/3520)	2.2%
(d) Return on assets ( Net income / Average total assets)	(217/2675)	8.1%	(77/2345)	3.3%
(e) Return on common stockholders' equity [ ( Net income - Preferred dividend ) / Average common stockholders' equity ]	(217-0)/1205	18.0%	(77-0)/1085	7.1%
(f) Debt to assets ratio ( Total debt / Total assets )	(1540/2740)	56.2%	(1400/2610)	53.6%
(g) Times interest earned ( Income before interest and taxes / Interest expense )	(335/25)	13.4 times	(130/20)	6.5 times