G H B D E F G Before you begin, print out all the pages in this workbook. 1 2 3 The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." page. 6 Required: 7 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 8 9 10 2 From these ratios, analyze the financial performance of Dandy. 11 12 13 1 3 14 1 LO 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Required Fcl. Stmts. Fcl. Ratios Ready Calculate E ABC D E F G H K 1 Dandy Distributors Ltd. 2 Income Statement 3 For the Year Ended December 31, 2020 4 5 2020 2019 6 Sales, net $21,133,000 $19,442,360 7 Less: Cost of goods sold 16,061,080 14,970,617 8 Gross profit 5,071,920 4,471,743 9 Operating expenses 10 Selling 11 Salaries and benefits 841,000 832,590 12 Delivery 104,400 95,004 13 Office supplies 153,600 152,064 14 Warranty 422,660 431,113 15 Total selling 1,521,660 1,510,771 16 General and administrative 17 Bad debts 633,990 646,670 18 Depreciation 1,176,660 1,200,193 19 Professional fees 168,900 157,077 20 Total general and adminstrative 1,979,550 2,003,940 21 Total operating expenses 3,501,210 3,514,711 22 Income (loss) from operations 1,570,710 957,032 23 Other income (expenses) 24 Rent revenue 187,000 200,090 25 Income (loss) before interest and income taxes 1,757,710 1,157,122 Interest expense 682,245 668,600 27 Income (loss) before income taxes 1,075,465 488,521 Income taxes (recovered) 247,357 112,360 29 Net income (loss) $828,108 $376,162 26 28 30 Required Fel. Stmts. Fcl. Ratios Ready Calculate D F L M N 2019 Total equity $5,730,250 376,162 (43,230) (38,400) $6,024,782 ABC E G H K 30 31 Dandy Distributors Ltd. 32 Statement of Changes in Equity 33 For the Year Ended December 31, 2020 34 2020 35 Retained 36 Common Pref. earnings 37 stock stock (deficit) Total equity 38 Balance (deficit) at Jan. 1 $652,000 $19,670 $5,353,112 $6,024,782 39 Stock issued 27,400 27,400 40 Net income (loss) 828,108 828,108 41 Cash dividends declared 42 Preferred (39,300) (39,300) 43 Common (38,400) (38,400) 44 Balance (deficit) at Dec. 31 $679,400 $19,670 $6,103,520 $6,802,590 45 46 Dandy Distributors Ltd. 47 Balance Sheet 48 At December 31, 2020 49 Assets 51 Current 2020 2019 Cash $63,000 $20,540 53 Accounts receivable, net 4,020,000 4,221,000 54 Inventories 2,420,000 2,468,400 55 6,503,000 6,709,940 56 Plant assets 57 Land 8,624,000 8,541,260 58 Building, net 6,537,000 6,929,220 Datanto nat Required Fcl. Stmts. Fcl. Ratios Ready Calculate 50 52 50 E E F G H L 57 58 59 60 61 62 63 ABC D Land Building, net Patents, net Goodwill I J K 8,624,000 8,541,260 6,537,000 6,929,220 27,300 27,300 25,600 25,600 15,213,900 15,523,380 $21,716,900 $22,233,320 64 $642,160 110,544 209,520 65 66 67 68 69 70 71 72 73 74 75 76 Liabilities Current Trade accounts payable Estimated current liabilities Estimated warranty liabilities Note payable Dividends payable Interest payable Salaries and benefits payable Sales tax payable Unearned rent Current portion of mortgage payable Corporate income taxes payable $698,000 117,600 194,000 24,200 77,700 14,300 90,000 23,000 19,500 2,237,764 11,110 3,507,174 81,630 14,157 89,100 23,920 16,674 1,621,014 11,443 2,820,163 Non-current Mortgage payable Less: Current portion 13,644,900 (2,237,764) 11,407,136 14,914,310 15,009,390 (1,621,014) 13,388,376 16,208,538 Total liabilities 83 84 85 Stockholders' Equity Common stock, $1 per share 679,400 652,000 10cza Required Fel. Stmts. Fcl. Ratios Desde 84 85 86 87 88 89 Stockholders' Equity Common stock, $1 per share Preferred stock, $10 per share Retained earnings (deficit) 679,400 19,670 6,103,520 6,802,590 $21,716,900 652,000 19,670 5,353,112 6,024,782 $22,233,320 Total liabilities and S/H equity 90 91 92 93 94 95 96 97 98 99 100 101 Required Fcl. Stmts. Fcl. Ratios Ready Calculate A B C E F G H 1 D Dandy Distributors Ltd. Selected Financial Ratios 2 3 4 5 2 3 4 LC 6 7 2020 industry average 1.9 1.2 70 7 8 8 9 9 10 11 12 13 14 15 16 17 18 19 20 21 a. Current ratio b. Acid-test ratio C. Accounts rec. collection (days) d. Days of sales in inventory e. Revenue operating cycle (days) f. Gross profit ratio g. Operating profit ratio h. Net profit ratio i. Sales to total assets ratio j. Return on total assets ratio k. Return on s/h equity ratio I. Debt to s/h equity ratio m. Times interest earned n. Earnings (loss) per common share 0. Price-earnings ratio (given) p. Dividend yield per common share (given) 52 122 25.7% 8.2% 4.3% 1.0 7.8% 14.2% Dandy's ratios 2020 2019 2.4 1.5 79 60 139 23.0% 4.9% 1.9% 0.9 4.2% 6.4% 2.7 1.4 $0.51 23 15 2018 2.7 1.7 94 67 167 22.8% 4.3% 1.6% 0.7 3.4% 5.2% 3.0 1.2 $0.43 12 4.1 2.4 $1.72 28 22 23 5% 5% 5% 6% 24 25 26 | Required Fcl. Stmts. Fel. Ratios Donde Calculata
