Calculate the following ratios for Bartlett Company in 2018, compare them with the ratios in 2019 and provide one- or two-sentence comments on how Bartlett Company did over the past two years on each ratio.

One example is done for you.

• Gross profit margin
• Operating profit margin
• Net profit margin
• Earnings per share
• Return on total assets
• Return on equity
• P/E ratio
• M/B ratio
• (Assuming the stock price at the end of 2018 was $25.)

Example:

Current ratio (2018)= 1,004/483=2.08.

Current ratio (2019)= 1.97 (from the slide 16).

It indicates that in general Bartlett Company has a good liquidity position. However, it is decreasing from 2018 to 2019, so managers need to keep an eye on this ratio.

Table 3.1 Bartlett Company Income Statements ($000) For the years ended December 31 2019 2018 Sales revenue $3,074 $2,567 Less: Cost of goods sold 2,088 1,711 Gross profits S 986 $ 856 Less: Operating expenses Selling expense $ 100 S 108 General and administrative expenses 194 187 Other operating expenses 35 35 Depreciation expense 239 223 Total operating expense S 568 $ 553 Operating profits S 418 $ 303 Less: Interest expense 93 91 Net profits before taxes S 325 $ 212 Less: Taxes 94 64 Net profits after taxes $ 231 $ 148 Less: Preferred stock dividends 10 10 Earnings available for common stockholders S 221 $ 138 Earnings per share (EPS) $2.90 $1.81 Dividend per share (DPS) $1.29 S0.75 Table 3.2 Bartlett Company Balance Sheets (5000) December 31 Assets 2019 2018 Cash $363 $ 288 Marketable securities 68 51 Accounts receivable 503 365 Inventories 289 300 Total current assets $1,223 $1,004 Land and buildings $2,072 $1,903 Machinery and equipment 1,866 1,693 Furniture and fixtures 358 316 Vehicles 275 314 Other (includes financial leases) 98 96 Total gross fixed assets (at cost) $4,669 $4,322 Less: Accumulated depreciation 2,295 2,056 Net fixed assets $2,374 $2,266 Total assets $3,597 $3,270 Liabilities and Stockholders' Equity Accounts payable $ 382 $ 270 Notes payable 79 99 Accruals 159 114 Total current liabilities $ 620 $ 483 Long-term debt (includes financial leases) 1,023 967 Total liabilities $1,643 $1,450 Preferred stock: cumulative 5%, $100 par, 2,000 $ 200 $ 200 shares authorized and issued 191 191 Common stock: $2.50 par, 100,000 shares authorized, shares issued and outstanding in 2019: 76,262; in 2018: 76,244 Paid-in capital in excess of par on common stock 428 417 Retained earnings 1,135 1,012 Total stockholders' equity $1,954 $1,820 Total liabilities and stockholders' equity $3,597 $3,270