Question

The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) BLOSSOM COMPANY Balance Sheets December 31 2020 2019 $330 $360 670 600 500 430 Current assets Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Total current assets Investments Property, plant, and equipment Intangibles and other assets 120 160 1,620 210 420 530 1,550 210 380 510 Total assets $2,780 $2,650 $990 Current liabilities Long-term liabilities Stockholders' equity-common $1,100 450 1,230 420 1,240 Total liabilities and stockholders' equity $2,780 $2,650 2019 $3,500 BLOSSOM COMPANY Income Statements For the Years Ended December 31 2020 Sales revenue $3,840 Costs and expenses Cost of goods sold 1,155 Selling & administrative expenses 2,400 Interest expense 25 Total costs and expenses 3,580 Income before income taxes 260 Income tax expense 78 Net income $ 182 1,090 2,330 20 3,440 60 18 $ 42

Answer 1

Sl.no. Particulars/ Ratios Formula 2019 2020 $1620/1100 a $1550/990 Current ratio current assets/current liabilities 1.47 1.57 b $1155/(500+430)/2 $1090/430+420/2 Inventory turnover ratio COGS/average inventory 0.62 0.64 $42/3500 с $182/3840 Profit margin Net profit/sales 4.7% 1.2% d $182/(2780+2650/2 $42/(2650+2370)/2 Return on assets PAT/Average total assets 1.7% 0.4% е $182/(1230+1240/2 $42/(1240+950/2 Return on shareholders equity PAT/Average shareholders equity 3.7% $(1100+450/2780 1.0% $(990+420/2650 f Debt to assets Ratio Debt/Assets 55.8% 53.2% g $(260+25)/25 $(60+20)/20 Times interest earned EBIT/Interest 11.4 4 * Kindly Comment down for any clarifications/ queries and please upvote.