2. You have been provided detailed information on the condition of Blunt Industries for the years 2015 and 2016. a. Calculate the ratios for 2015 and 2016. b. Evaluate the firm's financial position at the end of 2015 in terms of liquidity, capital structure, assert management and profitability. C. At the end of 2016, the firm has 5,000 shares of common stock outstanding, selling at $15 per share. What were the firm's earnings per share and price-earnings ratio. d. What is your analysis of the financial condition and performance of the firm compared to their industry benchmarks? Blunt Industries Balance Sheets December 31, 2015 2015 Cust Accounts receivable Inventory Total comments Land Buildings and equipment Less: Accumulated depreciation Total fixed assets Tocal assets 2016 2015 $11.250 15.625 36.250 563.125 $ 35.000 87900 SES,000 77,500 $140.625 20.500 39.150 S 50,600 S 1200 564940 114.400 $195.000 Accounts payable Short-term banknotes Total current liabilities Long-term debe Total liabilities Common stock Retained carnings Total common stockholders' equity Total dest and stockholders' equity $ 11,125 21.250 S 34 375 SS3 $20,313 39.375 $ 28.500 61.100 $ 99.700 $ 2935 5119 515 $70,313 $140625 34515 $ 75.65 $195.000 2015 Blunt Industries Income Statements for the Years Ended December 31, 2015 and 2015 2016 Sales (all credit) 5187.500 $ 400.000 Cos of goods sold (112.50 240.000 Gruss profit S 750 S160000 Operating expenses Fixed cash operating expenses 5031.500) S (52,500) Variable operating expenses 618.750) (40.000) Depreciation expense (25.000 Total operating expenses $(57.000 S (117.500 Earnings before interest and taxes $ 18,000 $ 42 SCO Interest expense 15.719) Earnings before taxes $ 12,281 Income taxes 16.141) (16703) Net income S 6.141 16703 2015 2016 Industry Averages 2.00 0.80 37 days Current ratio Acid-test ratio Average collection period Inventory turnover Debt ratio Times interest earned Operating profit margin Total asset urnover Fixed asset turnover Operating return on assets Return on quity 2.50 58.00% 3.80 10.00% 1.40 11.409 9.509
