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Calculate Trend% and Common% 1) Analyze liquidity. 2) Analyze profitability. 3) What items in the statement of cash flows should be of concern to ABC
Calculate Trend% and Common%
1) Analyze liquidity.
2) Analyze profitability.
3) What items in the statement of cash flows should be of concern to ABC company
ABC Company | ||||||
Comparative Balance Sheets | ||||||
As of December 31, 2015 & 2014 | ||||||
Trend % | Common % | Common % | ||||
2015 | 2014 | (2014 to 2015) | 2015 | 2014 | ||
Assets | ||||||
Current assets | ||||||
Cash | $15,875 | $46,200 | ||||
Accounts receivable | 300,000 | 224,300 | ||||
Inventory | 259,900 | 202,600 | ||||
Prepaid expenses | 14,700 | 28,200 | ||||
Total current assets | 590,475 | 501,300 | ||||
Long-term investments | 123,000 | 175,000 | ||||
Plant & equipment | 882,000 | 761,000 | ||||
Less Accumulated depreciation | 215,500 | 193,300 | ||||
Net Plant & equipment | 666,500 | 567,700 | ||||
Total assets | $1,379,975 | $1,244,000 | ||||
Liabilities & Stockholder's Equity | ||||||
Current liabilities | ||||||
Accounts payable | $184,900 | $242,100 | ||||
Accrued liabilities | 9,100 | 17,200 | ||||
Income taxes payable | 50,800 | 44,500 | ||||
Total current liabilities | 244,800 | 303,800 | ||||
Bonds payable | 233,000 | 122,000 | ||||
Total liabilities | 477,800 | 425,800 | ||||
Stockholder's equity | ||||||
Common stock | 622,500 | 655,000 | ||||
Retained earnings | 279,675 | 163,200 | ||||
Total stockholder's equity | 902,175 | 818,200 | ||||
Total liabilities & stockholder's equity | $1,379,975 | $1,244,000 | ||||
ABC Company | ||||||
Comparative income statements | ||||||
For the year's ended December 31, 2015 & 2014 | ||||||
Trend % | Common % | Common % | ||||
2015 | 2014 | (2014 to 2015) | 2015 | 2014 | ||
Sales | $1,106,800 | $1,000,000 | ||||
Cost of goods sold | 637,500 | 600,750 | ||||
Gross margin | 469,300 | 399,250 | ||||
Selling & Administrative expenses | 249,550 | 259,250 | ||||
Net operating income | 219,750 | 140,000 | ||||
Non-operating items: | ||||||
Gain on sale of investments | 25,500 | - | ||||
Gain on sale of equipment | 31,800 | - | ||||
Interest expense | 23,300 | 12,200 | ||||
Income before tax | 253,750 | 127,800 | ||||
Income tax expense | 76,125 | 38,340 | ||||
Net income | $177,625 | $89,460 | ||||
2015 | 2014 | |||||
Accounts receivable turnover | 4.222 | 4.458 | ||||
Current ratio | 2.412 | 1.650 | ||||
Debt ratio | 0.346 | 0.342 | ||||
Earnings per share | 0.355 | 0.179 | ||||
Inventory turnover | 2.757 | 2.965 | ||||
Quick ratio | 1.290 | 0.890 | ||||
Return on assets | 0.148 | 0.079 | ||||
Return on equity | 0.207 | 0.109 | ||||
Return on sales | 0.160 | 0.089 | ||||
Times interest earned | 11.891 | 11.475 | ||||
ABC Company | ||||||
Statement of Cash flows | ||||||
For the year ended December 31, 2015 | ||||||
Cash flows from operating activities: | ||||||
Net Income | 177,625 | |||||
Adjustments to net income: | ||||||
Depreciation expense | $62,200 | |||||
Increase in accounts receivable | (75,700) | |||||
Increase in inventory | (57,300) | |||||
Decrease in prepaid expenses | 13,500 | |||||
Decrease in accounts payable | (57,200) | |||||
Decrease in accrued liabilities | (8,100) | |||||
Increase in income taxes payable | 6,300 | |||||
Gain on sale of investments | (25,500) | |||||
Gain on sale of equipment | (31,800) | (173,600) | ||||
Net cash provided by operating activities | $4,025 | |||||
Cash flows from investing activities: | ||||||
Sold equipment | $170,800 | |||||
Purchased equipment | (300,000) | |||||
Sold long-term investments | 77,500 | |||||
Net cash used by investing activities | (51,700) | |||||
Cash flows from financing activities: | ||||||
Bonds issued | $141,000 | |||||
Bonds retired | (30,000) | |||||
Common stock retired | (32,500) | |||||
Dividends paid | (61,150) | |||||
Net cash provided by financing activities | 17,350 | |||||
Net change in cash | $(30,325) | |||||
Add beginning cash | 46,200 | |||||
Cash balance December 31, 2015 | $15,875 |
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