he condensed financial statements of Westward Corporation for 2006 are presented below. Westward Corporation Westward Corporation Balance Sheet Income Statement December 31, 2006 For the Year Ended December 31, 2006 Assets Revenues $2,000,000 Current assets Expenses Cash and temporary Cost of goods sold 1,080,000 investments $ 30,000 Selling and administrative Accounts receivable 70,000 expenses 495,000 Inventories 120,000 Interest expense 30,000 Total current assets 220,000 Total expenses 1,605,000 Property, plant, and Income before income taxes 395,000 equipment (net) 780,000 Income tax expense 140,000 Total assets $1,000,000 Net income $ 255,000 Liabilities and Stockholders' Equity Current liabilities $ 80,000 Long-term liabilities 300,000 Common stockholders' equity 620,000 Total liabilities and stockholders' equity $1,000,000 Westward Corporation Westward Corporation Balance Sheet Income Statement December 31, 2005 For the Year Ended December 31, 2005 Assets Revenues $2,500,000 Current assets Expenses Cash and temporary Cost of goods sold 1,750,000 investments $ 40,000 Selling and administrative Accounts receivable 90,000 expenses 500,000 Inventories 150,000 Interest expense 30,000 Total current assets 280,000 Total expenses 2,280,000 Property, plant, and Income before income taxes 220,000 equipment (net) 800,000 Income tax expense 77,000 Total assets $1,080,000 Net income $ 143,000 Liabilities and Stockholders' Equity Current liabilities $ 140,000 Long-term liabilities 320,000 Common stockholders' equity 620,000 Total liabilities and stockholders' equity $1,080,000 Additional data as of December 31, 2004: Inventory = $100,000; Total assets = $900,000; Common stockholders' equity = $540,000. Instructions 1. Compute the following listed ratios for 2006 and 2005 showing supporting calculations. (a) Current ratio = . (b) Debt to total assets = . (c) Times interest earned = . (d) Inventory turnover = . (e) Profit margin ratio = . (f) Return on common stockholders' equity = . (g) Return on assets = . 2. Perform horizontal and vertical analysis on Westward, show your results. 3. Assess the financial performance of Westward, given the analysis tools used above. 4. If the company wanted to perform industry comparison analysis, what references would you recommend it use?

FINAL EXAM: ACC/400 S. Duhn The condensed financial statements of Westward Corporation for 2006 are presented below. Westward Corporation Balance Sheet December 31, 2006 Assets Current assets Cash and temporary investments Accounts receivable Inventories Total current assets Property, plant, and equipment (net) Total assets Westward Corporation Income Statement For the Year Ended December 31, 2006 $ 30,000 70,000 120,000 220,000 780,000 $1,000,000 Liabilities and Stockholders' Equity Current liabilities $ 80,000 Long-term liabilities 300,000 Common stockholders' equity 620,000 Total liabilities and stockholders' equity $1,000,000 Revenues $2,000,000 Expenses Cost of goods sold 1,080,000 Selling and administrative expenses 495,000 Interest expense 30,000 Total expenses 1,605,000 Income before income taxes 395,000 Income tax expense 140,000 Net income $ 255,000 Westward Corporation Balance Sheet December 31, 2005 Assets Current assets Cash and temporary investments Accounts receivable Inventories Total current assets Property, plant, and equipment (net) Total assets Westward Corporation Income Statement For the Year Ended December 31, 2005 $ 40,000 90,000 150,000 280,000 800,000 $1,080,000 Revenues $2,500,000 Expenses Cost of goods sold 1,750,000 Selling and administrative expenses 500,000 Interest expense 30,000 Total expenses 2,280,000 Income before income taxes 220,000 Income tax expense 77,000 Net income $ 143,000 Liabilities and Stockholders' Equity Current liabilities $ 140,000 Long-term liabilities 320,000 Common stockholders' equity 620,000 Total liabilities and stockholders' equity $1,080,000 Additional data as of December 31, 2004: Inventory = $100,000; Total assets = $900,000; Common stockholders' equity = $540,000. Instructions 1. Compute the following listed ratios for 2006 and 2005 showing supporting calculations. (a) Current ratio = . (b) Debt to total assets = . (c) Times interest earned = . (d) Inventory turnover = . (e) Profit margin ratio = . (f) Return on common stockholders' equity = . (g) Return on assets = . Perform horizontal and vertical analysis on Westward both income statement and balance sheet, show your results. 3. Assess the financial performance of Westward, given the analysis tools used above. 2