KARL CORPORATION COMPARITIVE BALANCE SHEETS DECEMBER 31, 2020 AND 2019

Current Assets: 2020 2019

Cash and Cash Equivalent $ 560,000 $523,000

Marketable Securities 595,000 853,000

Notes Receivable 211,000 330,000

Accounts Receivable 471,000 353,000

Accrued Interest Receivable 594,000 639,000

Inventory 525,000 463,000

Prepaid Salaries 33,000 45,000

Prepaid Expenses 100,000 117,000

Total Current Assets $3,089,000 $3,323,000

Non Current Assets:

Plant and Equipment 829,000 600,000

(net of accumulated depreciation)

Total Assets $3,918,000 $3,923,000

Liabilities and Stockholders Equity

Current liabilities:

Notes Payable (Short Term) $779,000 $ 717,000

Accounts Payable 523,000 337,000

Interest Payable 234,000 334,000

Income Taxes Payable 150,000 165,000

Other Accrued Expenses payable 272,000 233,000

Total Current Liabilities $1,958,000 $1,786,000

Non Current Liabilities:

Notes Payable (Long term) 140,000 0

Bonds Payable 900,000800,000

Total Liabilities $2,998,000 $2,586,000

Stockholders Equity:

Capital Stock $450,000 $400,000

Additional Paid-in-Capital 150,000 100,000

Retained Earnings 320,000 837,000

Total Stockholders Equity $920,000 $1,337,000

Total Liabilities and Equity $3,918,000 $3,923,000

1. Prepare and find KPIS (ratios) from the above balance sheet that short term investors can use to analyze company performance in both years. Common stock had a market value of $65 in 2020 and in 2019 it is $56, Dividends in common stock ($5 per share) $43,000 in 2020 and on 2019 its ($4 per share) $23,000, Dividends on preferred stock ($7 per share) $170,000 and in 2019 its ($10 per share) $89,000. Net income for the year 2020 amounted to $13,000, Net sales are $844,000, and cost of goods sold are $474,000, operating expense $403,000 including depreciation expense of $35,000, interest expense is $119,000 and tax expense is $107,000. Moreover, net income for the year 2019 amounted to $9,000, Net sales are $820,000, and cost of goods sold are $450,000, operating expense $395,000 including depreciation expense of $30,000, interest expense is $129,000 and tax expense is $115,000. Total Assets are $1,833,000 in 2018, stockholder equity is $547,000, common stock holder equity $160,000, inventory is $253,000 and accounts receivables are $200,000 and account payables are $90,000.

2. Illustrate your findings in your own wording in minimum of 50 words for all ratios found on answer a by comparing both years of the company with industry average

1. Earnings Per Share: Industry Average: 8
2. Price Earning Per Ratio: Industry Average 15
3. Dividends Yield: Industry Average 7
4. Current Ratio: Industry Average 3
5. Acid Test Ratio: Industry Average 2
6. The Inventory Turnover Ratio: Industry Average 5
7. Account Receivable Turn Over Rate: Industry Average 7
8. Account Payable Turn Over Rate: Industry Average 7
9. Working Capital Cycle: Industry Average 80
10. Return on Equity Ratio: Industry Average 15
11. Return on Asset Ratio: Industry Average 10
12. Return on Common Stock Holder Equity: Industry Average 12
13. Debt Ratio: Industry Average 40
14. Times Interest Earned Ratio: Industry Average 8
15. Net Profit Margin: Industry Average 5
16. Capital Employed: Industry Average 10 on yearly basis
17. Return on Capital Employed: Industry Average 15.5
18. Net Income as a percentage of net sales: Industry Average 10
19. Operating Expense Ratio: Industry Average 15
20. Gross Profit Rate: Industry Average 40