Refer to the financial statements for Austin Logo Inc. in Problem 12-88B.

Refer to Problem 12-88B,

Austin Logo Inc.

Consolidated Income Statements

(In thousands)

Austin Logo Inc.
Consolidated Balance Sheets
(In thousands)

Required:
1. Compute the asset efficiency ratios for Austin for 2019 and
2018 (in percentage terms, rounded to two decimal places) and determine whether its asset efficiency has changed.
2. Compute the profitability ratios (rounded to two decimal places) for Austin for 2019 and 2018. Determine by how much Austin's profitability ratios have changed (in percentage terms, rounded to two decimal places) during the 2-year period.
3. Compute the debt management ratios for 2018 and 2019. Discuss whether creditors are as secure in 2019 as they were in 2018?

Transcribed Image Text:

Year ended December 31, 2019 2018 2017 $54,922 32,936 $21,986 $42,893 25,682 $17,211 $35,526 21,721 $13,805 421 Sales Cost of goods sold Gross margin Other income, net 397 439 $22,383 $17,650 $14,226 Costs and expenses: Selling and administrative Interest $17,857 1,356 $19,213 $ 3,170 $14,665 863 $15,528 $ 2,122 $12,754 622 $13,376 Income before income taxes 850 Provision for income taxes 885 746 623 $ 2,285 $ 1,376 227 Net income December 31, 2018 ASSETS 2019 2017 Current assets: Cash Accounts receivable $ 372 4,798 Inventories Total current assets Property, plant, and equipment (net) Other assets Total assets 301 3,546 4,521 $ 8,368 3,541 592 245 3,369 3,389 $ 7,003 2,937 552 $10,492 5,673 510,843 4,912 592 $16,347 $12,501