Question
Exercise 13-13 The condensed financial statements of Crane Company for the years 2016 and 2017 are presented below. CRANE COMPANY Balance Sheets December 31 (in
Exercise 13-13
The condensed financial statements of Crane Company for the years 2016 and 2017 are presented below.
CRANE COMPANY Balance Sheets December 31 (in thousands) | ||||
2017 | 2016 | |||
Current assets | ||||
Cash and cash equivalents | $330 | $360 | ||
Accounts receivable (net) | 530 | 460 | ||
Inventory | 640 | 570 | ||
Prepaid expenses | 130 | 160 | ||
Total current assets | 1,630 | 1,550 | ||
Property, plant, and equipment (net) | 410 | 380 | ||
Investments | 70 | 70 | ||
Intangibles and other assets | 530 | 510 | ||
Total assets | $2,640 | $2,510 | ||
Current liabilities | $880 | $850 | ||
Long-term liabilities | 660 | 560 | ||
Stockholders equitycommon | 1,100 | 1,100 | ||
Total liabilities and stockholders equity | $2,640 | $2,510 |
CRANE COMPANY Income Statements For the Year Ended December 31 (in thousands) | ||||
2017 | 2016 | |||
Sales revenue | $3,980 | $3,640 | ||
Costs and expenses | ||||
Cost of goods sold | 1,030 | 950 | ||
Selling & administrative expenses | 2,400 | 2,330 | ||
Interest expense | 10 | 20 | ||
Total costs and expenses | 3,440 | 3,300 | ||
Income before income taxes | 540 | 340 | ||
Income tax expense | 216 | 136 | ||
Net income | $ 324 | $ 204 |
Compute the following ratios for 2017 and 2016. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.)
(a) | Current ratio. | |
(b) | Inventory turnover. (Inventory on December 31, 2015, was $390.) | |
(c) | Profit margin. | |
(d) | Return on assets. (Assets on December 31, 2015, were $2,720.) | |
(e) | Return on common stockholders equity. (Equity on December 31, 2015, was $950.) | |
(f) | Debt to assets ratio. | |
(g) | Times interest earned. |
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