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: 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 2 From these ratios, analyze the financial performance of Dandy. 2019 2020 $21,133,000 16,061,080 5,071,920 $19,442,360 14,970,617 4,471,743 841,000 104,400 153,600 422,660 1,521,660 832,590 95,004 152,064 431,113 1,510,771 Sales, net Less: Cost of goods sold Gross profit Operating expenses Selling Salaries and benefits Delivery Office supplies Warranty Total selling General and administrative Bad debts Depreciation Professional fees Total general and adminstrative. Total operating expenses Income (loss) from operations Other income (expenses) Rent revenue Income (loss) before interest and income taxes Interest expense Income (loss) before income taxes Income taxes (recovered) Net income (loss) 633,990 1,176,660 168,900 1,979,550 3,501,210 1,570,710 646,670 1,200,193 157,077 2,003,940 3,514,711 957,032 187,000 1,757,710 682,245 1,075,465 247,357 $828,108 200,090 1,157,122 668,600 488,521 112,360 $376,162 Dandy Distributors Ltd. Statement of Changes in Equity For the Year Ended December 31, 2020 2020 2019 Common stock $652,000 27,400 Pref. stock $19,670 Retained earnings (deficit) $5,353,112 Total equity $5,730,250 Balance (deficit) at Jan. 1 Stock issued Net income (loss) Cash dividends declared Preferred Total equity $6,024,782 27,400 828,108 828,108 376,162 (39,300) (38,400) $6,103,520 (39,300) (38,400) Common (43,230) (38,400) $6,024,782 Balance (deficit) at Dec. 31 $679,400 $19,670 $6,802,590 Dandy Distributors Ltd. Balance Sheet At December 31, 2020 Assets 2019 Current Cash Accounts receivable, net Inventories 2020 $63,000 4,020,000 2,420,000 6,503,000 $20,540 4,221,000 2,468,400 6,709,940 Plant assets Land Building, net Patents, net Goodwill 8,624,000 6,537,000 27,300 25,600 15,213,900 $21,716,900 8,541,260 6,929,220 27,300 25,600 15,523,380 $22,233,320 Liabilities $642,160 110,544 209,520 Current 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 $698,000 117,600 194,000 24,200 77,700 14,300 90,000 23,000 19,500 2,237,764 11,110 3,507,174 81,630 14,157 89,100 23,920 16,674 1,621,014 11,443 2,820,163 Non-current Mortgage payable Less: Current portion 13,644,900 (2,237,764) 11,407,136 14,914,310 15,009,390 (1,621,014) 13,388,376 16,208,538 Total liabilities Stockholders' Equity Common stock, $1 per share Preferred stock, $10 per share Retained earnings (deficit) 679,400 19,670 6,103,520 6,802,590 $21,716,900 652,000 19,670 5,353,112 6,024,782 $22,233,320 Total liabilities and S/H equity Stockholders' Equity Common stock, $1 per share Preferred stock, $10 per share Retained earnings (deficit) 679,400 19,670 6,103,520 6,802,590 $21,716,900 652,000 19,670 5,353,112 6,024,782 $22,233,320 Total liabilities and S/H equity Dandy Distributors Ltd. Selected Financial Ratios 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 m. Times interest earned Earnings (loss) per common share 0. Price-earnings ratio (given) p. Dividend yield per common share (given) 2020 industry average 1.9 1.2 70 52 122 25.7% 8.2% 4.3% 1.0 7.8% 14.2% 4.1 Dandy's ratios 2020 2019 2.4 1.5 79 60 139 23.0% 4.9% 1.9% 0.9 4.2% 6.4% 2.7 1.4 2018 2.7 1.7 94 67 167 22.8% 4.3% 1.6% 0.7 3.4% 5.2% 3.0 1.2 2.4 n. $1.72 $0.51 $0.43 28 23 15 12 5% 5% 5% 6%