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Financial Statement Analysis

The financial statements of Kupps Company appear below:

KUPPS COMPANY

Comparative Balance Sheet

December 31,

_____________________________________________________________________________

Assets 2016 2015

Cash .................................................................................................. $ 25,000 $ 40,000

Marketable securities ........................................................................ 20,000 60,000

Accounts receivable (net) ................................................................. 40,000 30,000

Inventory ........................................................................................... 150,000 170,000

Property, plant and equipment (net) ................................................. 170,000 200,000

Total assets ................................................................................ $405,000 $500,000

Liabilities and stockholders' equity

Accounts payable ............................................................................. $ 25,000 $ 30,000

Short-term notes payable ................................................................. 40,000 90,000

Bonds payable .................................................................................. 75,000 160,000

Common stock .................................................................................. 175,000 145,000

Retained earnings ............................................................................ 90,000 75,000

Total liabilities and stockholders' equity...................................... $405,000 $500,000

KUPPS COMPANY

Income Statement

For the Year Ended December 31, 2016

Net sales ........................................................................................... $360,000

Cost of goods sold ............................................................................ 184,000

Gross profit ....................................................................................... 176,000

Expenses

Interest expense ......................................................................... $21,000

Selling expenses ........................................................................ 30,000

Administrative expenses ............................................................ 20,000

Total expenses ..................................................................... 71,000

Income before income taxes ............................................................ 105,000

Income tax expense ......................................................................... 30,000

Net income ........................................................................................ $ 75,000

Additional information:

a. Cash dividends of $50,000 were declared and paid in 2016.

b. Weighted-average number of shares of common stock outstanding during 2016 was 62,000 shares.

c. Market value of common stock on December 31, 2016, was $15 per share.

d. Net cash provided by operating activities for 2016 was $65,000.

Instructions

Using the financial statements and additional information, compute the following ratios for the Kupps Company for 2016. Show all computations.

1. Earnings per share _________.

2. Return on assets _________.

3. Price-earnings ratio _________.

4. Inventory turnover ratio _________.

5. Receivables turnover _________.

6. Asset turnover _________.

7. Net profit _________.

8. Days in inventory _________.

9. Return on invested capital _________.

10. Debt ratio _________.