Divots, Inc. 1999 Income Statement ($ in millions) Net sales. Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid Taxable income. Less: Taxes...... Net income .$1,384 .605 180 599 ..80 519 ..156 .$363 Addition to retained earnings.. Dividends paid ............ aaaa $254 109 Divots, Inc. 12/31/98 and 12/31/99 Balance Sheet ($ in millions) Cash Accounts rec. Inventory Total Net fixed assets 1998 $ 100 350 440 $ 890 1,556 1999 $ 121 425 410 $ 956 1,704 1998 Accounts payable $ 400 Notes payable 390 Total $ 790 Long-term debt 500 Common stock 600 Retained earnings 556 Total liabilities $2.446 aaaaa 1999 $ 350 370 $ 720 550 580 810 $2,660 aaaaa Total assets $2,446 aaaaa $2,660 aaaaa Ratio Summary for Years 1999 and 1998 for Divots, Inc. (note that the most recent year is on the right) Current Assets / Current Liabilities Cost of Goods Sold / Inventory Net Income / Total Assets Cost of goods sold / Sales Total Debt / Total Equity Divots 1998 1999 1.13 1.33 1.30 1.48 0.127 0.136 0.520 0.437 1.116 0.914 Industry Peers 1998 1999 1.45 1.28 1.10 1.08 0.143 0.129 0.565 0.624 1.005 0.860 than its peers. 20. Divots 1999 liquidity is A) better B) worse in 1999. 21. Divot's liquidity A) improved B) got worse than its peers. 22. Divot's 1999 long-term solvency ratio is A) better B) worse in 1999. 23. Divot's long-term solvency A) improved B) got worse than its peers. 24. Divots 1999 asset utilization is A) better B) worse than its peers. 25. Divot's 1999 profitability is A) better B) worse