Table 3.1 in Chapter 3 presents financial statements over the period 2014 through 2017 for R&E Supplies, Inc.

a. Use these statements to calculate as many of the ratios in Table 2.2 as you can.

b. What insights do these ratios provide about R&E’s financial performance? What problems, if any, does the company appear to have?

Table 3.1

Table 2.2

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TABLE 3.1 Financial Statements for R&E Supplies, Inc., December 31, 2014-2017 ($ thousands) Income Statements 2014 2015 2016 2017 $11,190 9,400 $13,764 11,699 $16,104 $20,613 17,727 Net sales Cost of goods sold 13,688 2,416 Gross profit Expenses: General, selling, and administrative expenses Net interest expense 1,790 2,065 2,886 1,019 1,239 1,610 2,267 100 103 110 90 Earnings before tax 671 723 696 529 Tax 302 325 313 238 Earnings after tax $ 369 $ 398 $ 383 $ 291 Balance Sheets Assets Current assets: $ 671 $ 551 $ 2,094 1,932 Cash and securities 644 412 Accounts receivable 1,343 1,789 1,376 2,886 2,267 Inventories 1,119 Prepaid expenses 14 12 15 18 Total current assets 3,147 128 3,728 4,685 5,583 Net fixed assets 124 295 287 Total assets $ 3,275 $ 3,852 $ 4,980 $ 5,870 Llabilities and Owners' Equity Current liabilities: $ $ 50 1,443 Bank loan 50 50 $ 50 Accounts payable Current portion long-term debt Accrued wages 1,007 2,426 3,212 60 50 50 100 5 10 18 Total current liabilities Long-term debt Common stock Retained earnings 1,122 960 1,550 2,536 3,380 910 860 760 150 150 150 150 1,043 1,242 1,434 1,580 Total liabilities and owners' equity $ 3,275 $ 3,852 $ 4,980 $ 5,870