Based on the information for T. P. Jarmon Company for the year ended December 31, 2018:

a. How much is the firm’s net working capital and what is the debt ratio?

b. Complete a statement of cash flows for the period. Interpret your results.

c. Compute the changes in the balance sheets from 2017 to 2018. What do you learn about T. P. Jarmon from these computations? How do these numbers relate to the statement of cash flows?

T. P. Jarmon Company Balance Sheet for Dec. 31, 2017 and Dec. 31, 2018

T. P. Jarmon Company Income Statement for the Year Ended Dec. 31, 2018

Transcribed Image Text:

Assets 2017 2018 Cash $15,000 $14,000 Marketable securities 6,000 6,200 Accounts receivable 42,000 33,000 Inventory 51,000 84,000 Prepaid rent $1,200 $1,100 Total current assets $115,200 $138.300 Net plant and equipment 286,000 270,000 SA08.300 Total assets S401,200 Liabilities and Equity 2017 2018 $48,000 6,000 Accounts payable $57,000 Accruals 5,000 Notes payable 13,000 15,000 $69,000 $75,000 $150,000 $183,300 $408.300 Total current liabilities Long-term debt $160,000 Common stockholders' equity $172,200 $401.200 Total liabilities and equity