Question

PLEASE NO WRITTEN WORK, please show work so I can understand and fully complete problem.

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Before you begin, print out all the pages in this workbook The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." page Required. 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 2 From these ratios, analyze the financial performance of Dandy

Dandy Distributors Ltd Income Statement For the Year Ended December 31, 2020 2020 2019 $21,776,000 $23,518,080 18,344,102 5,173,978 Sales, net Less: Cost of goods sold 16,767,520 5,008,480 Gross profit Operating expenses Selling Salaries and benefits Delivery Office supplies Warranty 778,000 172,200 101,000 435,520 1,486,720 770,220 158,424 106,050 470,362 1,505,056 Total selling General and administrative Bad debts Depreciation Professional fees 435,520 1,536,800 108,300 2,080,620 3,567,340 1,441,140 400,678 1,659,744 110,466 2,170,888 3,675,944 1,498,034 Total general and adminstrative Total operating expenses Income (loss) from operations Other income (expenses) Rent revenue 190,000 1,631,140 777,336 853,804 384,212 $469,592 186,200 1,684,234 847,296 836,937 376,622 $460,316 Income (loss) before interest and income taxes Income (loss) before income taxes Net income (loss) Interest expense Income taxes (recovered)

Dandy Distributors Ltd Statement of Changes in Equity For the Year Ended December 31, 2020 2020 Retained earnings (deficit) 2019 Common stock $728,000 28,000 Total equity Total equity $7,403,708 $6,886,581 $6,675,708 Balance (deficit) at Jan. 1 Stock issued Net income (loss) Cash dividend 28,000 469,592 469,592 460,316 s declared 33,300 27,300 $7,205,900 33,300 27,300 Preferred 31,968 24,843 $7,961,900 $7,403,708 Common $756,000 Balance (deficit) at Dec. 31

Dandy Distributors Ltd Balance Sheet At December 31, 2020 Assets Current 2020 2019 $75,000 2,270,000 3,930,000 6,275,000 $44,060 2,497,000 4,165,800 6,706,860 Cash Accounts receivable, net Inventories Plant assets Land Building, net Patents, net Goodwill 6,197,000 7,684,000 32,800 36,000 13,949,800 $20,224,800 5,748,272 8,068,200 32,800 36,000 13,885,272 20,592,132

Liabilities Current $773,000 119,100 139,000 17,900 (60,600) 14,000 105,800 10,800 20,100 1,210,423 19,000 2,368,523 $711,160 127,437 134,830 Trade accounts payable Estimated current liabilities Estimated warranty liabilities Note payable Dividends payable Interest payable Salaries and benefits payable Sales tax payable Unearned rent Current portion of mortgage payable Corporate income taxes payable (56,811) 14,560 110,032 10,368 15,517 1,355,674 17,100 2,439,867 Non-current Mortgage payable Less: Current portion 11,104,800 (1,210,423) 9,894,377 12,262,900 12,104,232 (1,355,674) 10,748,558 13,188,425 Total liabilities Stockholders' Equity Common stock 756,000 7,205,900 7,961,900 $20,224,800 728,000 6,675,708 7,403,708 $20,592,132 Retained earnings (deficit) Total liabilities and S/H equity

Dandy Distributors Ltd. Selected Financial Ratios 2020 industry averag Dandy's ratios 2020 2019 2.7 1.0 39 83 122 22.0% 6.4% 2.0% 2018 3.1 1.2 32 68 102 21.3% 5.2% 1.7% 1.3 5.8% 75% 2.0 a. Current ratio b. Acid-test ratio c. Accounts rec. collection (days) d. Days of sales in inventory e. Revenue operating cycle (days) f. Gross profit ratio g. Operating profit ratio h. Net profit ratio i. Sales to total assets ratio j. Return on total assets ratic k. Return on s/h equity ratio I. Debt to s/h equity ratio m. Times interest earned n. Earnings (loss) per common share o. Price-earnings ratio (given) p. Dividend yield per common share 2.8 1.0 37 84 121 23.5% 6.9% 2.3% 1.2 7.4% 6.6% 3.3 2.0 $0.81 15 70% 6.4% 1.8 1.8 $0.68$0.75 32 27 8% 8% 9% given

Before you begin, print out all the pages in this workbook The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." page Required. 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 2 From these ratios, analyze the financial performance of Dandy Dandy Distributors Ltd Income Statement For the Year Ended December 31, 2020 2020 2019 $21,776,000 $23,518,080 18,344,102 5,173,978 Sales, net Less: Cost of goods sold 16,767,520 5,008,480 Gross profit Operating expenses Selling Salaries and benefits Delivery Office supplies Warranty 778,000 172,200 101,000 435,520 1,486,720 770,220 158,424 106,050 470,362 1,505,056 Total selling General and administrative Bad debts Depreciation Professional fees 435,520 1,536,800 108,300 2,080,620 3,567,340 1,441,140 400,678 1,659,744 110,466 2,170,888 3,675,944 1,498,034 Total general and adminstrative Total operating expenses Income (loss) from operations Other income (expenses) Rent revenue 190,000 1,631,140 777,336 853,804 384,212 $469,592 186,200 1,684,234 847,296 836,937 376,622 $460,316 Income (loss) before interest and income taxes Income (loss) before income taxes Net income (loss) Interest expense Income taxes (recovered) Dandy Distributors Ltd Statement of Changes in Equity For the Year Ended December 31, 2020 2020 Retained earnings (deficit) 2019 Common stock $728,000 28,000 Total equity Total equity $7,403,708 $6,886,581 $6,675,708 Balance (deficit) at Jan. 1 Stock issued Net income (loss) Cash dividend 28,000 469,592 469,592 460,316 s declared 33,300 27,300 $7,205,900 33,300 27,300 Preferred 31,968 24,843 $7,961,900 $7,403,708 Common $756,000 Balance (deficit) at Dec. 31 Dandy Distributors Ltd Balance Sheet At December 31, 2020 Assets Current 2020 2019 $75,000 2,270,000 3,930,000 6,275,000 $44,060 2,497,000 4,165,800 6,706,860 Cash Accounts receivable, net Inventories Plant assets Land Building, net Patents, net Goodwill 6,197,000 7,684,000 32,800 36,000 13,949,800 $20,224,800 5,748,272 8,068,200 32,800 36,000 13,885,272 20,592,132 Liabilities Current $773,000 119,100 139,000 17,900 (60,600) 14,000 105,800 10,800 20,100 1,210,423 19,000 2,368,523 $711,160 127,437 134,830 Trade accounts payable Estimated current liabilities Estimated warranty liabilities Note payable Dividends payable Interest payable Salaries and benefits payable Sales tax payable Unearned rent Current portion of mortgage payable Corporate income taxes payable (56,811) 14,560 110,032 10,368 15,517 1,355,674 17,100 2,439,867 Non-current Mortgage payable Less: Current portion 11,104,800 (1,210,423) 9,894,377 12,262,900 12,104,232 (1,355,674) 10,748,558 13,188,425 Total liabilities Stockholders' Equity Common stock 756,000 7,205,900 7,961,900 $20,224,800 728,000 6,675,708 7,403,708 $20,592,132 Retained earnings (deficit) Total liabilities and S/H equity Dandy Distributors Ltd. Selected Financial Ratios 2020 industry averag Dandy's ratios 2020 2019 2.7 1.0 39 83 122 22.0% 6.4% 2.0% 2018 3.1 1.2 32 68 102 21.3% 5.2% 1.7% 1.3 5.8% 75% 2.0 a. Current ratio b. Acid-test ratio c. Accounts rec. collection (days) d. Days of sales in inventory e. Revenue operating cycle (days) f. Gross profit ratio g. Operating profit ratio h. Net profit ratio i. Sales to total assets ratio j. Return on total assets ratic k. Return on s/h equity ratio I. Debt to s/h equity ratio m. Times interest earned n. Earnings (loss) per common share o. Price-earnings ratio (given) p. Dividend yield per common share 2.8 1.0 37 84 121 23.5% 6.9% 2.3% 1.2 7.4% 6.6% 3.3 2.0 $0.81 15 70% 6.4% 1.8 1.8 $0.68$0.75 32 27 8% 8% 9% given

Answer 1

2020:

a)

Current Ratio = Total Current Assets / Total Current Liabilities

= $6,275,000 / $2,368,523

= 2.7

b)

Acid-Test Ratio = Total Current Assets - Inventory - Prepaid Expense / Total Current Liabilities

= $6,275,000 - $3,930,000 - $0 / $2,368,523

= $2,345,000 / $2,368,523

= 1.0

c)

Accounts Receivable collection in days = Average Accounts Receivable / Net Sales * 365 days

= $2,383,500 / $21,776,000 * 365 days

= 40 days

Working notes:

Average Accounts Receivable = Accounts Receivable, net in 2019 + Accounts Receivable, net in 2020 / 2

= $2,497,000 + $2,270,000 / 2

= $4,767,000 / 2

= $2,383,500

d)

Days of Sales in Inventory = Average Inventory / Cost of Goods Sold * 365 days

= $4,047,900 / $16,767,520 * 365 days

= 88 days

Working Notes:

Average Inventory = Inventory in 2019 + Inventory in 2020 / 2

= $4,165,800 + $3,930,000 / 2

= $8,095,800 / 2

= $4,047,900

Answer 2

2020 Ratio Calculation Formula Answer Income before interest and in 1631140/777336 Times Inrerest Earned Interest Expense 2.10 m No. of Common Stock 756000/10 75600 Since the par value of the common stock is not mentioned in the question, it is assumed to be $10 value per common stock Common Dividend No. of Common Stock n Earning pe 27300/75600 756000/27300 27300/756000 100 r Common Share 0.36 Common Divided o Price Earnings Ratio $ 27.69 mon Dividend X 100 Common Stock p Dividend Yied per common share 3.61% As mentioned in the question, I have solved m,n,o,p

Answer 3

2020 Formula Ratio Calculation Answer Current Ratio 6275000/2368523 Current Liabilities 2.65 Acid-Test Ratio tAsset-Invento 6275000-3930000)/2368523 Current Liabilities-Bank Overdraft (Beginning AccountsRceivable Ending Accounts Receivable)/2 0.99 Figures of 2019 are the beginning figures for 2020 Average Accounts Receivable 2497000+22 2383500 9.14 Debtors Turnover Ratio Average Accounts Receivable 365 Debtors Turnover Ratio As per question, all sales are assumed to be credit sales. 365/9.14 Accounts. Rec. Collection Average Invent 39.93 c 4165800+3930000)/2 16767520/4047900 365/4.14 inning Inventory+Ending Inventory)/2 4047900 Cost of Goods Sold Turnover Ratio 4.14 365 Inventory Turnover Ratio As per policy, I can solve four sub parts of a question. 88.16 of sales in inven