Golden Corporation declared and paid $3,300 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data:
Current Previous Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense Income before income taxes Income tax expense Net income Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) $195,000 116,000 79,000 56,300 3,000 19,700 5,910 $ 13,790 $177,000 106,000 71,000 52,800 2,900 15,300 3,300 $ 12,000 Current liabilities Note payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings $ 6,590 22,000 43,000 48,000 $119,590 $ 18,100 48,000 31,800 5,600 16,090 $119,590 $ 8,300 24,500 38,000 41,000 $ 111,800 $ 21,100 48,000 31,800 5,300 5,600 $111,800 Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 4-a. Stockholders' equity totaled $31,800 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.) 4-b. Are the current year results better, or worse, than those for the previous year? 4-a. Return on Equity Current Year Previous Year 4-b. Current year return on equity ratio is: O Better Worse Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 5-a. Net property and equipment totaled $36,500 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.) 5-b. Are the current year results better, or worse, than those for the previous year? 5-a. Fixed Asset Turnover Current Year Previous Year 5-b. Current year fixed asset turnover is: O Better O Worse Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 6-a. Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2 decimal places.) 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 6-a. Debt-to- Assets Current Year Previous Year 6-b. Current year debt-to-assets ratio is: Larger Proportion OSmaller Proportion Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 7-a. Compute the times interest earned ratios for the current and previous years. (Round your answers to 1 decimal place.) 7-b. Are the current year results better, or worse, than those for the previous year? 7-a. Times Interest Earned Current Year Previous Year 7-b. Current year times interest earned ratio is: O Better O Worse Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 8-a. After Golden released its current year's financial statements, the company's stock was trading at $33. After the release of its previous year's financial statements, the company's stock price was $24 per share. Compute the P/E ratios for both years. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) 8-b. Does it appear that investors have become more (or less) optimistic about Golden's future success? Show less 8-a Price/Earnings Ratio Current Year Previous Year 8-b. Current year P/E ratio is: More Optimistic Less Optimistic
