Comprehensive Problem 2 - St of Cash Flows and Ratios Algo D. Ennis Inc. D. Ennis Inc. Income Statement Comparative Balance Sheets For years ended December 31, 2017 and 2018 December 31, 2018 and 2017 2018 2017 Change 2018 2017 Current assets: Sales (all on credit) $478,000 $430,000 Cash $68,520 $53,700 $14,820 Cost of goods sold (306,000) (251,000) Accounts receivable (net) 36,000 30,000 6,000 Gross margin 172,000 179,000 Inventory 46,000 44,000 2,000 Prepaid expenses 1,000 2,200 -1,200 Depreciation expense 37,000 51,000 Other current assets 1,380 2,100 -720 Other operating 104,000 86,000 Total current assets 152,900 132,000 20,900 expenses Total operating 141,000 137,000 expenses Operating income 31,000 42,000 Long-term Investments 78,000 54,000 24,000 Other income (expenses) Plant assets 305,000 255,000 50,000 Interest expense (4,800) (77,800) (51,000) 26,800 Less: accumulated (3,600) depreciation 3,500 Total plant assets 5,000 227,200 204,000 23,200 Gain on sale of investments Loss on sale of plant assets Total other income (expenses) (2,200) (2,600) Total assets 458,100 390,000 68,100 (12,000) (2,700) Current liabilities: Current liabilities: 29,000 39,300 Accounts payable $27,400 $28,000 $-600 Income before income taxes Income taxes expense Net income (8,700) (11,790) $20,300 $27,510 Accrued liabilities Income taxes payable Total current liabilities 3,600 800 31,800 3,000 600 3,000 -2,200 34,000 -2,200 242,000 273,800 180,000 62,000 214,000 59,800 D. Ennis Inc. Long term liabilities: Statement of Retained Earnings Notes Payable For the year ended December 31, 2018 Total liabilities 2018 2017 Ret. earnings, Jan. 1 $26,000 $0 Stockholders' equity Add: net income 20,300 27,510 Common stock, $5 par value Deduct: Dividends (12,000). (1,510) Additional paid-in capital Increase in retained 8,300 26,000 Retained earnings earnings Ret. earnings, Dec. 31 $34,300 $26,000 Total stockholders' equity Total liabilities and stockholders' equity 120,000 30,000 34,300 120,000 0 30,000 0 26,000 8,300 176,000 8,300 $390,000 $68,100 184,300 $458,100 24,000 24,000 Other information: Shares of common stock outstanding Earnings per share Dividends per share Market price per share, common stock $0.85 $0.5 $1.15 $0.06 $12 $13 Cash Flows from Oper Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis Inc St Bal St Inc St Bal Sheet Ratios Choose Numerator Choose Denominator Enter Numerator Value Enter Denominator Value $ 152,900 S 31,800 Ratio Current ratio Current assets Current liabilities Acid-test ratio Cash + Short-term investments + Current receivables S 104,520 Current liabilities S 31,800 Inventory turnover $ Cost of goods sold Average inventory 306.000 45,000 $ Days' sales in inventory X 365 S 46.000 Ending inventory Cost of goods sold $ 306,000 Accounts receivable turnover Net sales Average accounts receivable, net Days' sales in receivables Accounts receivable, net X 365 Net sales Total asset turnover Net sales Average total assets Debt-to-equity ratio Total liabilities Total equity Profit margin Net income Net sales Return on total assets Net income Average total assets Return on common stockholders' equity Net income - Preferred dividends Average common stockholders' equity Pricelearnings ratio (P/E) Market price per common share Earnings per share Dividend yield Annual cash dividends per share Market price per common share