Exercise 9-13

The condensed financial statements of Carla Vista Co. for the years 2016 and 2017 are presented below.

2016 $360 560 410 160 CARLA VISTA CO. Balance Sheets December 31 (in thousands) 2017 Current assets Cash and cash equivalents $330 Accounts receivable (net) 630 Inventory 480 Prepaid expenses 130 Total current assets 1,570 Property, plant, and equipment (net) Investments 170 Intangibles and other assets 530 Total assets $2,680 Current liabilities $980 Long-term liabilities 500 Stockholders' equity-common 1,200 Total liabilities and stockholders' equity $2,680 1,490 380 410 170 510 $2,550 $950 400 1,200 $2,550 CARLA VISTA CO. Income Statements For the Year Ended December 31 (in thousands) 2017 2016 Sales revenue $3,820 $3,480 Costs and expenses Cost of goods sold 1,130 1,050 Selling & administrative expenses 2,400 2,330 Interest expense 20 Total costs and expenses 3,540 3,400 Income before income taxes 280 80 Income tax expense 112 32 Net income $ 168 $ 48 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 $420.) (c) Profit margin. (d) Return on assets. (Assets on December 31, 2015, were $2,020.) (e) Return on common stockholders' equity. (Equity on December 31, 2015, was $970.) (f) Debt to assets ratio. (9) Times interest earned. 2017 2016 Current ratio. 3.15 :1 3.04 : 1 Inventory turnover. Profit margin. Return on assets. Return on common stockholders' equity. Debt to assets ratio. Times interest earned. times times