Gerrard Construction Co is an excavation contractor The following summarized data (in thousands) are taken from the December 31, 2019, financial statements For the Year Ended December 31, 2019 Net revenues $ 127,800 Cost of services provided 36,800 Depreciation expense 22,100 Operating income $ 68,900 Interest expense 30,198 Income tax expense 10,900 Net income $ 27,802 At December 31, 2019 Assets Cash and short term investments $ 9,700 Accounts receivable, net 30,700 Property, plant, and equipment, net 242,600 Total assets $ 283,000 Liabilities and Stockholders Equity Accounts payable $ 5,150 Income taxes payable 5,450 Notes payable (long term) 143,800 Paid in capital 30,000 Retained earnings 98,600 Total liabilities and stockholders equity $ 283,000 At December 31, 2018, total assets were $251,800 and total stockholders equity was $103,000 There were no changes in notes payable or paid in capital during 2019 Required The cost of services provided amount includes all operating expenses (selling, general, and administrative expenses) except depreciation expense What do you suppose the primary reason was for management to separate depreciation from other operating expenses From a conceptual point of view, should depreciation be considered a cost of providing services Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co To which specific balance sheet accounts should a financial analyst relate these expenses Calculate the companys average income tax rate ( Hint You must first determine the earnings before taxes ) Calculate the amount of total current assets Why doesnt the company have a Merchandise Inventory account Calculate the amount of working capital and the current ratio at December 31, 2019 Assess the companys overall liquidity Calculate ROI (including margin and turnover) and ROE for the year ended December 31, 2019 Calculate the amount of dividends declared and paid during the year ended December 31, 2019 ( Hint Do a T account analysis of retained earnings )

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Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2019, financial statements: For the Year

Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2019, financial statements:


For the Year Ended December 31, 2019:
Net revenues	$	127,800
Cost of services provided		36,800
Depreciation expense		22,100
Operating income	$	68,900
Interest expense		30,198
Income tax expense		10,900
Net income	$	27,802
At December 31, 2019:
Assets
Cash and short-term investments	$	9,700
Accounts receivable, net		30,700
Property, plant, and equipment, net		242,600
Total assets	$	283,000
Liabilities and Stockholders Equity
Accounts payable	$	5,150
Income taxes payable		5,450
Notes payable (long term)		143,800
Paid-in capital		30,000
Retained earnings		98,600
Total liabilities and stockholders equity	$	283,000

At December 31, 2018, total assets were $251,800 and total stockholders equity was $103,000. There were no changes in notes payable or paid-in capital during 2019. Required:

The cost of services provided amount includes all operating expenses (selling, general, and administrative expenses) except depreciation expense. What do you suppose the primary reason was for management to separate depreciation from other operating expenses? From a conceptual point of view, should depreciation be considered a cost of providing services?
Why do you suppose the amounts of depreciation expense and interest expense are so high for Gerrard Construction Co.? To which specific balance sheet accounts should a financial analyst relate these expenses?
Calculate the companys average income tax rate. (Hint: You must first determine the earnings before taxes.)

Calculate the amount of total current assets.
Why doesnt the company have a Merchandise Inventory account?
Calculate the amount of working capital and the current ratio at December 31, 2019. Assess the companys overall liquidity.
Calculate ROI (including margin and turnover) and ROE for the year ended December 31, 2019.
Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (Hint: Do a T-account analysis of retained earnings.)