Financial statements for Gibson Company follow. GIBSON COMPANY Balance Sheets As of December 31 2019 2018 $ 20,000 20,800 49,000 134,000 28,000 251,800 32,000 295,000 29,000 $607,800 $ 16,000 6,800 41,000 142,000 13,000 218,800 25,000 280,000 24,000 $547,800 Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable Other Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 31,600 113,800 23,000 $ 17,700 100,000 17,000 134,700 168,400 120,000 32,000 152,000 320,400 120,000 27,000 147,000 281,700 80,000 80,000 127,400 287,400 $607,800 80,000 80,000 106, 100 266,100 $547,800 2018 $290,000 6,600 296,600 GIBSON COMPANY Statements of Income and Retained Earnings For the Years Ended December 31 2019 Revenues Sales (net) $310,000 Other revenues 9,600 Total revenues 319,600 Expenses Cost of goods sold 155,000 Selling, general, and administrative 63,000 Interest expense 10,400 Income tax expense 63,000 Total expenses 291,400 Net earnings (net income) 28,200 Retained earnings, January 1 106,100 Less: Preferred stock dividends 3,200 Common stock dividends 3,700 Retained earnings, December 31 $127,400 127,000 58,000 9,600 62,000 256,600 40,000 73,000 3,200 3,700 $106,100 Required Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet. a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, 2018, were $42,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, 2018, was $148,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt to assets ratio. (Round your answers to the nearest whole percent.) i. Debt to equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) I. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets. (Round your answers to 2 decimal places.) n. Return on investment. (Round your answers to 2 decimal places.) o. Return on equity. (Round your answers to 2 decimal places.) p. Earnings per share. (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: 2018, $12.15; 2019, $13.30). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) 2019 $ 83,400 1.50 2018 84,100 1.62 6.89 times 6.99 52 0.88 415 days times days times days times days 1.12 326 Working capital Current ratio Quick ratio Receivables turnover Average days to collect accounts receivable Inventory turnover Average days to sell inventory Debt to assets ratio Debt to equity ratio Number of times interest earned Plant assets to long-term debt Net margin Asset turnover Return on investment Return on equity Earnings per share Book value per share Price-earnings ratio Dividend yield 1.11 9.77 1.06 11.63 times times m. per share per share per share per share
