General Question/Exercise 5-6 What are the components of the Return on Assets ratio and what do these tell you about how the return on assets can be increased? Compute the Return on Assets and its components for the Colorado Outdoors Company for 2018 and 2019 whose financial statements are below. (For any 2018 ratios that require a beginning balance sheet number to compute an average, assume the beginning balance was the same as the ending.) General Question/Exercise 5-7 What are the components of the Return Equity ratio and what do these tell you about how the return on equity can be increased? Compute the Return on Equity and its components for the Colorado Outdoors Company for 2018 and 2019 whose financial statements are below. (For any 2018 ratios that require a beginning balance sheet number to compute an average, assume the beginning balance was the same as the ending.) ords English (United States) au asset univer: WITA erus uwe userver VITUTT COTT 2018 COLORADO OUTDOORS COMPANY Balance Sheets As of December 31 2019 Assets Current assets Cash $23,000 Marketable securities 11,800 Accounts receivable (net) 60,000 Inventories 164,000 Prepaid items 18.000 Total current assets 276,800 $21,000 7,800 51,000 152,000 13,000 244.800 Investments Plant (net) Land Total assets 25,000 280,000 26.000 607.800 20,000 255,000 23.000 542.800 Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities $20,800 94,800 14.000 129,600 $15.700 90,000 15,000 I 120.700 Noncurrent liabilities Bonds payable 110,000 100,000 Other 31.000 28.000 Tatal. n LALO ne non ish (United States) Focus E E asser turnover. Varenus uu WE UUSIVUT U. VIIIT Component appears TIAN HEL) Land Total assets ZOU,000 26,000 607,800 20,000 23,000 542,800 Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities $20,800 94,800 $15,700 90,000 15,000 120.700 14,000 129,600 Noncurrent liabilities Bonds payable Other Total noncurrent liabilities Total liabilities 110,000 31,000 141.000 270,600 100,000 28,000 128.000 248.700 80,000 100,000 80,000 100,000 Stockholders' equity Preferred stock, (par value $10,4% cumulative) Common stock (No par; 50,000 shares authorized;10,000 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 157.200 342,200 607.800 114,100 294,100 T542.800 2018 $390,000 190,000 200,000 COLORADO OUTDOORS COMPANY Statements of Income and Retained Earnings For the Years Ended December 31 2019 Revenues Sales (net) $430,000 Cost of goods sold 210,000 Gross Profit 220,000 Operating Expenses Selling expenses 52,000 General, and administrative 78.000 Total operating expenses 130,000 Operating Income 90,000 Other Income (Expense) Gain on sale of assets 5,000 Interest expense (14,000) Total Other Income (expense) (9.000) Income before income taxes 81,000 Income tax expense 24,000 Net earnings (net income) 57.000 50,000 75.000 125.000 75,000 7.600 (12,600) (5,000) 70,000 21,000 49.000 COLORADO OUTDOORS COMPANY Statement of Retained Earnings For the Years Ended December 31 2019 Retained earnings, January 1 114,100 Less: Preferred stock dividends 3,200 Common stock dividends 5,700 Net earnings (net income) 52,000 Retained earnings, December 31 157.200 2018 73,000 3,200 4,700 49,000 114,100