Before you begin, print out all the pages in this workbook. The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." page. Required: 2020. Assume all sales are on credit. Show your work. 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2 From these ratios, analyze the financial performance of Dandy. Dandy Distributors Ltd. Income Statement For the Year Ended December 31, 2020 2020 2019 $21,776,000 $23,518,080 Sales, net Less: Cost of goods sold 16,767520 18,344,102 5,008,480 5,173.978 Gross profit Selling Salaries and benefits Delivery 778,000 172,200 101,000 435,520 1.486,720 770,220 158,424 106,050 470,362 Office supplies Warranty Total selling 1,505 General and administrative Bad debts 435,520 1,536,800 400,678 1,659,744 110,466 2,170,888 3,675,944 1,498,034 Depreciation Professional fees Total operating expenses Other income (expenses) Total general and adminstrative 3,567,340 1,441,140 Income (loss) from operations Rent revenue 190,000 1,631,140 777,336 853,804 384,212 $469,592 186,200 1,684,234 847,296 836,937 376,622 $460,316 Income (loss) before interest and income taxes Income (loss) before income taxes Net income (loss) Interest expense Income taxes (recovered) Dandy Distributors Ltd. Statement of Changes in Equity For the Year Ended December 31, 2020 2020 2019 Retained Common stock earnings (deficit) Total equity Total equity $6,675,708 $%7,403,708 $6,886,581 Balance (deficit) at Jan. 1 Stock issued Net income (loss) Cash dividends declared $728,000 28,000 28,000 469,592 469,592 460,316 Preferred Commorn 33,300 27,300 33,300 31,968 24,843 $7,961,900 $7,403,708 Balance (deficit) at Dec. 31 $756,000 57205,900$7.961900 57403,708 Dandy Distributors Ltd Balance Sheet At December 31, 2020 Assets 2020 2019 Current 44,060 2,497,000 4,165,800 6,706,860 $75,000 2,270,000 3,930,000 6,275,000 Cash Accounts receivable, net Plant assets 6,197,000 7,684,000 32,800 36,000 13,949,800 Land Building, net Patents, net Goodwill 5,748,272 8,068,200 32,800 13,885.272 20,224,800 $20,592,132 es Current $711,160 127,437 134,830 Trade accounts payable Estimated current liabilities Estimated warranty liabilities Note payable Dividends payable Interest payable Salaries and benefits payable Sales tax payable Unearned rent Current portion of mortgage payable Corporate income taxes payable $773,000 119,100 139,000 17,900 (60,600) 14,000 105,800 10,800 20,100 1,210,423 19,000 2,368,523 (56,811) 14,560 110,032 10,368 15,517 1,355,674 17,100 2,439,867 Non-current Mortgage payable Less: Current portion 11,104,800 12,104,232 (1,210,423) (1.355,674) 9,894,377 10,748,558 13,188,425 12262.90013,188 25 Total liabilities Stockholders' Equity 728,000 6,675,708 7,961,900 7,403,708 $20,224,800 $20,592,132 Common stock Retained earnings (deficit) 756,000 7,205,900 Total liabilities and S/H equity Dandy Distributors Ltd. Selected Financial Ratios 2020 industry average Dandy's ratios 2019 2018 2020 2.8 a. Current ratio b. Acid-test ratio c. Accounts rec. collection (days) d. Days of sales in inventory e. Revenue operating cycle (days) f. Gross profit ratio g. Operating profit ratio h. Net profit ratio i. Sales to total assets ratio j. Return on total assets ratio k. Return on s/h equity ratio I. Debt to s/h equity ratio 1.2 32 84 121 23.5% 6.9% 2.3% 83 122 102 22.0% 21.3% 2.0% 1.7% 7.0% 6.4% 5.8% 7.5% 7.4% 6.6% 3.3 m. Times interest earned n. Earnings (loss) per common share o. Price-earnings ratio (given) p. Dividend yield per common share $0.68 $0.75 $0.81 (given)
