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Income Statements Balance Sheets Fashion Forward Dream Designs Fashion Forward Fashion Forward Dream Designs Dream Designs 12/31/18 12/31/18 12/31/18 12/31/17 12/31/18 12/31/17 Revenue Current Assets
Income Statements | Balance Sheets | ||||||||||
Fashion Forward | Dream Designs | Fashion Forward | Fashion Forward | Dream Designs | Dream Designs | ||||||
12/31/18 | 12/31/18 | 12/31/18 | 12/31/17 | 12/31/18 | 12/31/17 | ||||||
Revenue | Current Assets | ||||||||||
Credit Sales | 2,000,000 | 4,320,000 | Cash and Cash Equivalents | 950,000 | 980,000 | 1,710,000 | 1,705,000 | ||||
Non-Credit Sales | 500,000 | 1,080,000 | Accounts Receivable | 200,000 | 150,000 | 250,000 | 275,000 | ||||
Total Revenue | 2,500,000 | 5,400,000 | Inventory | 112,000 | 105,000 | 200,000 | 215,000 | ||||
Other Current Assets | 35,000 | 50,000 | 120,500 | 100,000 | |||||||
Cost of Sales | 1,400,000 | 3,250,000 | Total Current Assets | 1,297,000 | 1,285,000 | 2,280,500 | 2,295,000 | ||||
Gross Profit | 1,100,000 | 2,150,000 | Property, Plant and Equipment | 635,000 | 700,000 | 850,000 | 900,000 | ||||
Goodwill | 750,000 | 750,000 | 1,150,000 | 1,150,000 | |||||||
Operating Expenses | Other Long-Term Assets | 65,000 | 70,000 | 100,750 | 105,000 | ||||||
Research and Development | 50,000 | 200,000 | Total Assets | 2,747,000 | 2,805,000 | 4,381,250 | 4,450,000 | ||||
Selling, General, and Administrative | 750,000 | 1,600,000 | |||||||||
Total Operating Expenses | 800,000 | 1,800,000 | Current Liabilities | ||||||||
Accounts Payable | 545,000 | 535,000 | 845,750 | 875,000 | |||||||
Earnings Before Interest and Taxes | 300,000 | 350,000 | Short-Term Debt | 25,000 | - | 50,000 | 60,000 | ||||
Other Current Liabilities | 600,000 | 510,000 | 730,000 | 740,000 | |||||||
Interest Expense | (18,000) | (50,000) | Total Current Liabilities | 1,170,000 | 1,045,000 | 1,625,750 | 1,675,000 | ||||
Income Before Tax | 282,000 | 300,000 | Long-Term Debt | 75,000 | - | 120,500 | 130,000 | ||||
Income Tax Expense | (145,500) | (87,500) | Other Long-Term Liabilities | 100,000 | 75,000 | 155,000 | 165,000 | ||||
Net Income | 136,500 | 212,500 | Total Liabilities | 1,345,000 | 1,120,000 | 1,901,250 | 1,970,000 | ||||
Stockholders Equity | |||||||||||
Common Stock | 500,000 | 775,000 | 749,500 | 942,750 | |||||||
Preferred Stock | 150,000 | 294,500 | 390,000 | 409,250 | |||||||
Retained Earnings | 752,000 | 615,500 | 1,340,500 | 1,128,000 | |||||||
Total Stockholders Equity | 1,402,000 | 1,685,000 | 2,480,000 | 2,480,000 | |||||||
Total Liabilities and Stockholders Equity | 2,747,000 | 2,805,000 | 4,381,250 | 4,450,000 | |||||||
- | - | - | - | ||||||||
You work in the mergers and acquisitions department of a large conglomerate who is looking to invest in a retail business. Two companies, Fashion Forward and Dream Designs, are the final two options being considered. Compute the following ratios for each company:
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