2020 Question #3 Springhill Corporation Balance Sheet December 31, 2021, and December 31", 2020 (in thousands) 2021 Assets Current Assets: Cash $90,000 Accounts Receivable 60,000 Inventory 18,000 Prepaid Expenses 2,000 Total Current Assets 170,000 Capital Assets (PP&E) 50,000 Total Assets $220,000 $57,000 40,000 10,000 1,000 108,000 30,000 $138,000 Liabilities: Accounts Payable Accrued Liabilities Income Taxes Payable Total Current Liabilities Long Term Debt Total liabilities $11,000 6,000 5,000 22,000 40,000 362,000 $4,000 3,000 8,000 15,000 8,000 S23,000 Shareholders' Equity Common Shares Retained Earnings Total Shareholders Equity Total Liabilities & Shareholders Equity 60,000 55,000 60,000 98,000 158,000 $220,000 115,000 $135.000 Springhill Corporation Income Statement For the years ended December 31st, 2021 and 2020 (in thousands) 2021 2020 $200,000 40,000 160,000 $110,000 35,000 75,000 Sales Cost of Goods Sold Gross Profit Expenses: Advertising Selling, General & Administrative Research & Development Depreciation Total Operating Expenses come from Continuing Operations interest Income Less: Interest Expense Income from Continuing Operations before taxes Income Taxes Net Income 40,000 30,000 12,000 10,000 92.000 68,000 3,000 4,000 67,000 24,000 S43,000 20,000 20,000 9,000 10,000 59,000 16,000 2,500 1,000 17,500 6,000 $11,500 REQUIRED: a) Calculate the dollar change and the percentage change (indicate + or -) for each of the following accounts: Sales Cost of Goods Sold Net Income Inventory 2021 $200,000 40,000 $43,000 18,000 2020 S change % change $110,000 $90,000 81.8% 35,000 5,000 14.3% $11,500 $31.500 273.9% 10,000 $8.000 80% b) Calculate the following Ratios for Springhill Company for 2021 and indicate if the ratio measures liquidity, efficiency, solvency, profitability or market position L, E, S, P, M RATIO 200,000 Current Ratio Acid Test Ratio Accounts Receivable Turnover 300,000 (40,000+ 60,000)%2 200,000 50.000 = 4 times Days Sales in Inventory x 365 teen 40,000 167.25 days Merchandise Turnover Debt Ratio Equity Ratio Profit Margin Return on Total Assets (# Earnings Per Share of shares 21,500) Calculate the current ratio, debt ratio and profitability ratio for 2020. Taking into consideration the trend and the industry average, comment these Springhill Corporations 2021 ratios. 2021 2020 Ratios Industry Comment on the 2021 ratios Average ratios Calculate (given - (remember to compare to last year and the from industry statistic) answers from industry information) above) Current Ratio 2.3 to Debt Ratio 42% Profit Margin 8%