Exercise 23-14

The following information (in $000) has been obtained from Sandhill Limiteds financial statements for the fiscal years ended December 31.

		2020			2019			2018
Total assets		$735			$584			$506
Current liabilities		89			81			89
Total liabilities		250			163			173
Total shareholders equity		499			421			409
Income before taxes		93			58			44
Interest expense		10			6			5
Net cash provided by operating activities		118			104			99
Net income		79			55			39
Capital expenditures for the year		30			20			15
Number of common shares outstanding		60			60			60
Taken from stock market at Dec. 31 Market price per share (not in $000)		$16.80			$12.41			$12.10

There were no preferred shares issued by Sandhill nor were there any dividends paid in any of the three years.

Calculate the following items for Sandhill Limited. (Round price earnings ratio, times interest earned ratio and free cash flow to operating cash flows answers to 1 decimal place, e.g. 52.7 and other answers to 2 decimal places, e.g. 52.75.)

1.		Current cash debt coverage ratio for fiscal years 2019 and 2020.		enter Current cash debt coverage ratio in times rounded to 2 decimal places	times		enter Current cash debt coverage ratio in times rounded to 2 decimal places	times
2.		Cash debt coverage ratio for fiscal years 2019 and 2020.		enter Cash debt coverage ratio in times rounded to 2 decimal places	times		enter Cash debt coverage ratio in times rounded to 2 decimal places	times
3.		Earnings per share for fiscal years 2019 and 2020.		$enter Earnings per share in dollars rounded to 2 decimal places			$enter Earnings per share in dollars rounded to 2 decimal places
4.		Price earnings ratio for fiscal years 2019 and 2020.		enter Price earnings ratio in times rounded to 1 decimal place	times		enter Price earnings ratio in times rounded to 1 decimal place	times
5.		Times interest earned ratio for fiscal years 2019 and 2020.		enter Times interest earned ratio rounded to 1 decimal place	times		enter Times interest earned ratio rounded to 1 decimal place	times
6.		Free cash flow to operating cash flows for fiscal years 2019 and 2020.		enter percentages rounded to 1 decimal place	%		enter percentages rounded to 1 decimal place	%

Comment on whether there has been improvement or deterioration from 2019 to 2020 in the six ratios calculated. Take the perspective of Sandhills management.

1.		Current cash debt coverage ratio for fiscal years 2019 and 2020.		select an option Deteriorated OR Improved
2.		Cash debt coverage ratio for fiscal years 2019 and 2020.		select an option Deteriorated OR SightlyImproved
3.		Earnings per share for fiscal years 2019 and 2020.		select an option DeterioratedOR Improved
4.		Price earnings ratio for fiscal years 2019 and 2020.		select an option Deteriorated ORImproved
5.		Times interest earned ratio for fiscal years 2019 and 2020.		select an option Improved OR Deteriorated
6.		Free cash flow to operating cash flows for fiscal years 2019 and 2020		select an option Improved OR Deteriorated