Golden Corporation declared and paid $5,000 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 $280,000 $245,000 Cost of goods sold 150,000 140,000 Gross profit 130,000 105,000 Operating expenses 73,300 66,400 Interest expense 4,700 4,600 Income before income taxes 52.000 34,000 Income tax expense 15,600 5,000 Net income $36,400 $ 29,000 Balance Sheet Cash $ 8,100 $ 10,000 Accounts receivable (net) 39,000 33,000 Inventory 60,000 55,000 Property and equipment (net) 65,000 53,000 $172.100 5156,000 Current liabilities $ 15,700 $ 33,000 Note payable (long-term) 65,000 65,000 Common stock (par $5) 42,000 42,000 Additional paid in capital 9,000 7,000 Retained earnings 40.400 $172100 $156,000 Required: 1. Compute the gross profit percentage for the current and previous years. Are the current year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current year results better, or worse, than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. 4. Stockholders' equity totaled $42,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current year results better, or worse than those for the previous year? 5. Net property and equipment totaled $45,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current year results better, or worse than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current year results better, or worse than those for the previous year? 8. After Golden released its current year's financial statements, the company's stock was trading at $50. After the release of its previous year's financial statements, the company's stock price was $38 per share. Compute the P/E ratios for both years. Does it appear that investors have become more or less) optimistic about Golden's future success? Required 1 Requirebas2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 2-a. Compute the net profit margin for the current and previous years. (Round your answers to 1 decimal place.) 2-b. Are the current year results better, or worse, than those for the previous year? 12-a. Current Year Previous Year Net Profit Margin % % 2.b Current year net profit margin is: Better Worse Required 1 Required Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 2-a. Compute the net profit margin for the current and previous years. (Round your answers to 1 decimal place.) 2-b. Are the current year results better, or worse, than those for the previous year? 2-a Net Profit Margin Current Year % Previous Year % 2-b. Current year net profit margin is: O Better O Worse Required 1 Required 2 Repuired 3 Required 4 Required 5 Required 6 Required 7 Required 8 3-a. Compute the earnings per share for the current and previous years. TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. (Round your answers to 2 decimal places.) 3-b. Are the current year results better, or worse, than those for the previous year? Show less |3-a. Earnings per Share Current Year Previous Year 3-b Current year EPS is Better Worse Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 4-a. Stockholders' equity totaled $42,000 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.) 4-6. Are the current year results better, or worse, than those for the previous year? 4-a Return on Equity % Current Year Previous Year % 4-6 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 $45,000 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 Worse Required 1 Required 2 Required 3 Required 4 Required 5 Required 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 6-5. Current year debt-to-assets ratio is: Larger Proportion Smaller Proportion Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required Required 8 7-a. Compute the times interest earned ratios for the current and previous years. (Round your answers to I 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: Better 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 $50. After the release of its previous year's financial statements, the company's stock price was $38 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