CCB Enterprises Statement of Income For the Year Ended December 31, 2017 (thousands omitted) $800,000 60,000 $860,000 Revenue: Net sales Other Total revenue Expenses: Cost of goods sold Research and development Selling and administrative Interest Total expenses Income before income taxes Income taxes Net income $540,000 25,000 155,000 20,000 $740,000 $120,000 48,000 $ 72,000 CCB Enterprises Comparative Statements of Financial Position December 31, 2017 and 2016 (thousands omitted) 2017 2016 $ 26,000 $ 21,000 48,000 65,000 5,000 $144,000 50,000 62,000 3,000 $136,000 Assets Current assets: Cash and short-term investments Receivables, less allowance for doubtful accounts ($1,100 in 2017 and $1,400 in 2016) Inventories, at lower of FIFO cost or market Prepaid items and other current assets Total current assets Other assets: Investments, at cost Deposits Total other assets Property, plant, and equipment: Land Buildings and equipment, less accumulated depreciation ($126,000 in 2017 and $122,000 in 2016) Total property, plant, and equipment Total assets $106,000 10,000 $116,000 $106,000 8,000 $114,000 $ 12,000 $ 12,000 268,000 $280,000 $540,000 248,000 $260,000 $510,000 Liabilities and Owners' Equity Current liabilities: Short-term loans Accounts payable Salaries, wages, and other Total current liabilities Long-term debt Total liabilities Owners' equity: Common stock, at par Paid-in capital in excess of par Total paid-in capital Retained earnings Total owners' equity Total liabilities and owners' equity $ 22,000 72,000 26,000 $120,000 $160,000 $280,000 $ 24,000 71,000 27,000 $122.000 $171,000 $293,000 $ 44,000 64,000 $108,000 152,000 $260,000 $540,000 $ 42,000 61,000 $103,000 114,000 $217,000 $510,000 1. Calculate the following financial ratios for 2017 for CCB Enterprises (Show your work): a) Times interest earned b) Return on total assets c) Return on common stockholders' equity d) Debt-to-equity ratio (at December 31, 2017) e) Current ratio (at December 31, 2017) f) Quick (acid-test) ratio (at December 31, 2017) g) Accounts receivable turnover ratio (Assume that all sales are on credit.) h) Number of days' sales in receivables i) Inventory turnover ratio (Assume that all purchases are on credit.) j) Number of days' sales in inventory k) Number of days in cash operating cycle 2. Comment on the overall financial health of CCB Enterprises. Indicate any information that is not provided in the problem that you would need to fully evaluate the company's financial health. Make sure to address all the ratios
