* Income Statement - X Friendly Burgers Inc. Income Statement For the Year Ended December 31, 2020 th ne sto Net sales ly $345,000 190,000 alysis Cost of goods sold T 31 155,000 Gross margin Operating expenses Selling expenses Administrative expenses 41,500 24,500 6,400 Interest expense 72,400 Total operating expenses Operating income Income taxes (30%) 82,600 24.780 Net income $57,820 Print Done then cont Statement of retained earnings - X ha Friendly Burgers Inc. Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 Add net income for 2020 $ 50,000 57,820 107,820 Less dividends: Preferred $ 16,000 33,000 Common 49,000 Retained earnings, December 31, 2020 $ 58,820 Inc.'s fir * Balance Sheet on to vil on to vi Friendly Burgers Inc. Balance Sheet December 31, 2020 and 2019 Whole nu Perform decima 2020 2019 Assets Cash $ 29,970|| Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Less Accumulated amortization Goodwill Total assets Liabilities Accounts payable Notes payable (due in 30 days) 33,050 39.000 1,600 170,000 (38,000) 15,000 250,620 $ 14,100 21,500 44,500 3,100 163,000 (25,500) 15,000 235,700 eivable $ enses mit and mulated 17,500 $ 2.300 18,500 3.700 Done Print er in the * Required 1 1. Perform a horizontal analysis of the comparative balance sheets. Comment on the analysis 2. Perform a vertical analysis of the income statement. The industry standards are gross margin of 45 percent and net income of 15 percent Comment on the results 3. Calculate each of the following ratios for the year ended December 31, 2020 The industry standards are provided in parentheses for some of the ratios a. Current ratio (2.17) h. Debt/equity ratio b. Acid-test ratio Times-interest-earned ratio C Inventory turnover 1 Rate of return on sales d. Days' sales in inventory k Rate of return on assets e. Accounts Receivable Rate of return on common shareholders' equity turnover f Days' sales in receivables m. Pricelearnings ratio--the market price per share is $11.00 at year-end, when dividends were paid (14.00) g Debt ratio (0.47) n. Dividend yield (4.15%) 4. Comment on your calculations for Friendly Burgers Inc. in Requirement 3. Include comments for those ratios for which industry standards were provided. * Income Statement - X Friendly Burgers Inc. Income Statement For the Year Ended December 31, 2020 th ne sto Net sales ly $345,000 190,000 alysis Cost of goods sold T 31 155,000 Gross margin Operating expenses Selling expenses Administrative expenses 41,500 24,500 6,400 Interest expense 72,400 Total operating expenses Operating income Income taxes (30%) 82,600 24.780 Net income $57,820 Print Done then cont Statement of retained earnings - X ha Friendly Burgers Inc. Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 Add net income for 2020 $ 50,000 57,820 107,820 Less dividends: Preferred $ 16,000 33,000 Common 49,000 Retained earnings, December 31, 2020 $ 58,820 Inc.'s fir * Balance Sheet on to vil on to vi Friendly Burgers Inc. Balance Sheet December 31, 2020 and 2019 Whole nu Perform decima 2020 2019 Assets Cash $ 29,970|| Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Less Accumulated amortization Goodwill Total assets Liabilities Accounts payable Notes payable (due in 30 days) 33,050 39.000 1,600 170,000 (38,000) 15,000 250,620 $ 14,100 21,500 44,500 3,100 163,000 (25,500) 15,000 235,700 eivable $ enses mit and mulated 17,500 $ 2.300 18,500 3.700 Done Print er in the * Required 1 1. Perform a horizontal analysis of the comparative balance sheets. Comment on the analysis 2. Perform a vertical analysis of the income statement. The industry standards are gross margin of 45 percent and net income of 15 percent Comment on the results 3. Calculate each of the following ratios for the year ended December 31, 2020 The industry standards are provided in parentheses for some of the ratios a. Current ratio (2.17) h. Debt/equity ratio b. Acid-test ratio Times-interest-earned ratio C Inventory turnover 1 Rate of return on sales d. Days' sales in inventory k Rate of return on assets e. Accounts Receivable Rate of return on common shareholders' equity turnover f Days' sales in receivables m. Pricelearnings ratio--the market price per share is $11.00 at year-end, when dividends were paid (14.00) g Debt ratio (0.47) n. Dividend yield (4.15%) 4. Comment on your calculations for Friendly Burgers Inc. in Requirement 3. Include comments for those ratios for which industry standards were provided
