Flint Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Flint and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,930 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,940 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Flint's cash flow problems are due primarily to the company's desire to finance a $299,490 plant expansion over the next 2 fiscal years through internally generated funds. The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. Flint Corporation Balance Sheet March 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) Total assets 2021 $18,210 148,520 131,030 105,670 1,463,200 $1,866,630 2020 $ 12,550 131,480 124,980 50,450 1,431,100 $1,750,560 Liabilities and Owners' Equity Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earnings Total liabilities and stockholders' equity $78,850 75,800 16,240 1,308,430 387,310 $1,866,630 $90,930 61,460 20,980 1,297,370 279,820 $1,750,560 *Cash dividends were paid at the rate of $1 per share in fiscal year 2020 and $2 per share in fiscal year 2021. Sales revenue Cost of goods solda Gross margin Operating expenses Income before income taxes Income taxes (40%) Net income Flint Corporation Income Statement For the Fiscal Years Ended March 31 2021 $2,998,210 1,538,040 1,460,170 852,870 607,300 242,920 $364,380 2020 $2,708,130 1,419,360 1,288,770 776,650 512,120 204,848 $307,272 Depreciation charges on the plant and equipment of $99,160 and $102,770 for fiscal years ended March 31, 2020 and 2021, respectively, are included in cost of goods sold. (a) Compute the following items for Flint Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%.) 1. 2. 3. Current ratio for fiscal years 2020 and 2021. Acid-test (quick) ratio for fiscal years 2020 and 2021. Inventory turnover for fiscal year 2021. Return on assets for fiscal years 2020 and 2021. (Assume total assets were $1,695,960 at 3/31/19.) Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year 2020 to 2021. 4. 5. 2020 2021 1. Current ratio :1 :1 2. Acid-test (quick) ratio :1 : 1 3. Inventory turnover times 4. Return on assets % 5. Percent Changes Percent Increase Sales revenue % Cost of goods sold % Gross margin % Net income after taxes %
