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Freedom Corporation reported these figures: (Click the icon to view the balance sheet.) (Click the icon to view the income statement.) Freedom Corporation has 3,000,000
Freedom Corporation reported these figures: (Click the icon to view the balance sheet.) (Click the icon to view the income statement.) Freedom Corporation has 3,000,000 shares of common stock outstanding. Its stock has traded recently at $27.20 per share. You would like to gain a better understanding of Freedom Corporation's financial position. Assume all sales are on credit. Read the requirement a. Inventory turnover Enter the formula on the first line, then calculate the inventory turnover on the next line. (Enter amounts in thousands as provided to you in the problem statement. Round your answer to one decimal place.) / Cost of goods sold 5,780 Average inventory 1,700 Inventory turnover 3.4 $ 1 $ Freedom times per year. To determine if this seems reasonable, a comparison with would be necessary to reach a better conclusion. A Balance sheet X 2016 Freedom Corporation Balance Sheets December 31, 2017 and 2016 (amounts in thousands) 2017 Assets Current assets: Cash 2,730 $ Accounts receivables 2,400 Inventory 1,900 Other current assets 800 Total current assets 7,830 $ Other assets 21,500 $ Total assets 29,330 $ 2,400 2,000 1,500 2,150 8,050 19,000 27,050 Liabilities * Balance sheet 2,400 1,900 800 2,000 1,500 2,150 Accounts receivables Inventory Other current assets Total current assets Other assets Total assets $ 7,830 $ 21,500 8,050 19,000 $ 29,330 $ 27,050 $ Liabilities Total current liabilities Long-term liabilities Total liabilities 9,000 $ 2,330 7,000 4,050 $ 11,330 $ 11,050 Stockholders' equity Total common stockholders' equity 18,000 16,000 Total liabilities and equity 29,330 $ 27,050 1 Income statement X Freedom Corporation Income Statement For the Year Ended December 31, 2017 (amounts in thousands) 2017 Sales revenue $ 16,060 5,780 10,280 2,630 Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Income before income taxes Less: Income tax expense $ 7,650 300 7,350 4,800 $ 2,550 Net income Calculate the following ratios for 2017 and interpret the results: a. Inventory turnover b. Days' sales in receivables c. Acid-test ratio d. Times-interest-earned e. Gross profit percentage f. Operating income percentage g. Return on stockholders' equity h. Earnings per share i. Price/earnings ratio
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