Question

Question: The financial statements of XYZ Company appear below: XYZ COMPANY Comparative Balance Sheet December 31, Assets Cash .........+4000... Short-term investments. Accounts receivable (net)...-9000 Inventory Property, plant and equipment (net) ........ Total assets ...... 2018 $ 35,000 15,000 50,000 50,000 250.000 $400.000 2017 $ 40,000 60,000 30,000 70,000 300.000 $500.000 Liabilities and stockholders' equity Accounts payable......... $ 10,000 Short-term notes payable ................. 40,000 Bonds payable ...... 88,000 Common stock ............ .....2.1.X 160,000 Retained earnings.- 960.0. 102.000 Total liabilities and stockholders' equity .................................... $400,000 $ 30.000 90,000 160,000 145.000 75,000 $500,000 XYZ COMPANY Income Statement For the Year Ended December 31, 2018 $360.000 198,000 162,000 Net sales. Cost of goods sold. Gross profit... Expenses Interest expense ............... Selling expenses....... Administrative expenses .. Total expenses..... 1000 Income before income taxes... Income tax expense........ Net income ................ $12,000 40,000 59,000 111.000 51,000 15,000 $ 36,000 Additional information: a. Cash dividends of $9,000 were declared and paid in 2018. b. Weighted average number of shares of common stock outstanding during 2018 was 30,000 shares. C. Market value of common stock on December 31, 2018, was $21 per share.

Answer 1

Current ratio - Total current assets/Total current liabilities Total current assets = (35000-15000+50000-50000) Total current assets = $ 150,000/- Total current liabilities = (10000+40000) Total current liabilities = $ 50,000/. Current ratio = (150000/50000) Current ratio = 3 Times Return on common stockholders equity = (Net Income/Average stockholders equity)*100 Average stockholders equity is = (160000+102000+145000+75000)/2 Average stockholders equity is = $ 241,000/. Return on common stockholders equity = (36000/241000)*100 Return on common stockholders equity = 14.94% Approx. Price earnings ratio = Market price per share/Earnings per share Earnings per share is = (Net Income/No of outstanding common stock) Earnings per share is = (36000/30000) Earnings per share is = $ 1.207. Price earnings ratio = (21/1.20) Price earnings ratio = 17.50 Acid test ratio - Quick assets/Total current liabilities Quick assets = Total current assets - Inventory Quick assets = (150000-50000) = $ 100,000/. Acid test ratio = (100000/50000) Acid test ratio = 2 Times
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Receivable turnover = (Net sales/Average accounts receivable) Receivable turnover = (360000/(50000-30000)/2) Receivable turnover = (360000/40000) Receivable turnover = 9 Times Times interest earned = (EBIT/Interest expense) Times interest earned = ((51000-12000/12000) Times interest earned = 5.25 Times Profit margin = (Net income/Net sales)*100 Profit margin = (36000/360000)*100 Profit margin = 10% Days in inventory = 365 Days/Inventory turnover ratio Inventory turnover = (Cost of goods sold/Average inventory) Inventory turnover = (198000/(50000+70000)/2) Inventory turnover = (198000/60000) Inventory turnover = 3.30 Times Days in inventory = 365/3.30 Days in inventory = 110.61 Days Payout ratio - (Dividend/Net Income)*100 Payout ratio = (9000/36000)*100 Payout ratio -25° Return on assets = (Net Income Averag total assets)*100 Return on assets = (36000/(400000-500000)/2)*100 Return on assets = (36000/450000)*100 Return on assets = 8%

Answer 2

Arrange the follwing using the report form of sfp