Question

Problem 13-02A (Video) The comparative statements of Carla Vista Co. are presented here: All sales were on account. Net cash provided by operating activities for 2020 was $251,000. Capital expenditures were $135,000, and cash dividends were $59,000. Compute the following ratios for 2020. (Round free cash flow to o decimal places, e.g. 5,275 and all other answers to 2 decimal places, e.g. 1.83 or 1.83%. Use 365 days for calculation.) (a) Earnings per share 2019 $1,757,500 1,013,000 744,500 486,000 258,500 Carla Vista Co. Income Statements For the Years Ended December 31 2020 Net sales $1,897,540 Cost of goods sold 1,065,540 Gross profit 832, Selling and administrative expenses 507.000 Income from operations 325,000 Other expenses and losses Interest expense 24,000 Income before income taxes 301,000 Income tax expense 94,000 Net incorre $207,000 (b) Return on common stockholders' equity (c) Return on assets (d) Current ratio 22,000 236,500 75,000 $161,500 (e) Accounts receivable turnover (f) Average collection period (9) Inventory turnover days times (h) Days in Inventory days times 2020 2019 ( Times interest eamed 6) Asset turnover (k) Debt to assets ratio times W) Free cash flow $60,100 74,000 124,800 128,000 386,900 659,000 $1,045,900 $64,200 50,000 109,800 117,500 341,500 530,300 $871,800 Carla Vista Co. Balance Sheets December 31 Assets Current assets Cash Debt investments (short-term) Accounts receivable Inventory Total current assets Plant assets (net) Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock (s5 par) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $167,000 45,500 212,500 230,000 442,500 $152,400 44,000 196,400 210,000 406,400 290,000 313,400 603,400 $1,045,900 300,000 165,400 465,400 $871,800

Answer 1

Earning per share = Net income / Weighted average outstanding common shares	$207,000/59,000 = $3.51 (60,000+58,000/2)
Return on common stockholders equity = Net income / Average common stockholders equity	$207,000/$534,400 = 38.74%(465,400+603,400/2)
Return on assets = Net income / Average total assets	$207,000/$958,850 = 21.59% 1,045,900+871,800/2)
Current ratio = Current assets/ Current liabilities	$386,900/212,500 = 1.82:1
Accounts receivable turnover = Net credit sales / Average accounts receivable	$1,897,540/117,300 = 16.18 Times ($109,800+124,800/2)
Average collection period = 365 / Accounts receivable turnover	365 / 16.18 = 22.56 days
Inventory turnover = Cost of goods sold / Average inventory	$1,065,540/122,750 = 8.68 Times ($117,500+128,000/2)
Days in inventory = 365 / Inventory turnover	365/8.68 = 42.05 days
Times interest earned = Income before interest and tax / Interest expense	$325,000 / $24,000 = 13.54 Times
Asset turnover = Net sales / Average total assets	$1,897,540/958,850 = 1.98 Times ($871,800+1,045,900/2)
Debt to assets ratio = Total liabilities / Total assets	$442,500/$1,045,900 = 42.31%
Free cash flow = Net cash provided by operating activities - Capital expennditure - Cash dividends	$251,000-135,000-59,000 = $57,000