On a whim, you buy a scratch-off lottery ticket and win $10,000. You decide that the prudent action would be to invest this money by purchasing shares in a publicly-traded company. Your friend, Natalie, recommended that you should look at Accuride because she believes that its stock is a safe investment with significant growth potential. You decide to pull the following, abbreviated financials and information related to Accuride from the internet:

ACCURIDE CORPORATION Comparative Balance Sheet For the Year Ended December 31, 2021

Assets Cash ........................................................................................................................ Short-term marketable securities .......................................................................... Accounts receivable (net)....................................................................................... Inventory ................................................................................................................ Property, plant and equipment (net) .....................................................................

Total assets .....................................................................................................

Liabilities and stockholders' equity Accounts payable ................................................................................................... Short-term notes payable ...................................................................................... Bonds payable ........................................................................................................ Common stock ....................................................................................................... Retained earnings ..................................................................................................

Total liabilities and stockholders' equity.........................................................

ACCURIDE CORPORATION Income Statement For the Year Ended December 31, 2021

Net sales ................................................................................................................. Cost of goods sold .................................................................................................. Gross profit............................................................................................................. Expenses

Administrative expenses ................................................................................. Selling expenses .............................................................................................. Interest expense..............................................................................................

Total expenses ......................................................................................... Operating income................................................................................................... Income tax expense ............................................................................................... Net income .............................................................................................................

2021 $ 35,000

15,000 50,000 50,000

250,000 $400,000

$ 10,000 40,000 88,000 160,000 102,000 $400,000

. 2020 $ 40,000 60,000 30,000 70,000 300,000 $500,000

$ 30,000 90,000 160,000 145,000 75,000 $500,000

$360,000 198,000 162,000

111,000 51,000 15,000

$ 36,000

30,000 shares.

$59,000 40,000 12,000

Additional information:

Cash dividends of $9,000 were declared and paid in 2021.

Weighted-average number of shares of common stock outstanding during 2021 was

Market value of common stock on December 31, 2021, was $21 per share.

Industry averages:

2

o Current ratio - 4:1 o Return on common stockholders equity - 16.4% o Price-earnings ratio 18.4 times o Earnings per share $1.35 o Average Collection Period 31.2 days o Average days in inventory 27.1 days o Quick ratio 2:1 o Times interest earned 6.0 times o Profit margin 10.2% o Return on assets 7.9% o Debt ratio 52% o Equity ratio 48% o Debt-to-equity ratio 1.08

Required

Analyze the financial statements and make a determination about whether you would purchase shares of Accuride? Be sure to provide justification for your decision.