ORIOLE COMPANY Balance Sheets December 31 Assets 2022 2021 $ 69,000 $ 65,000 Cash Debt investments (short-term) 55,000 40,000 Accounts receivable 109,000 89,000 168,000 Inventory 239,000 23,000 26,000 Prepaid expenses Land 129,000 129,000 Building and equipment (net) 264,000 186,000 $888,000 $703,000 Total assets Liabilities and Stockholders' Equity $169,000 $109,000 Notes payable Accounts payable 66,000 52,000 42,000 42,000 Accrued liabilities Bonds payable, due 2025 251,000 170,000 Common stock, $10 par 204,000 204,000 156,000 Retained earnings 126,000 $888,000 $703,000 Total liabilities and stockholders' equity ORIOLE COMPANY Income Statements For the Years Ended December 31 2022 2021 $902,000 $800,000 Sales revenue Cost of goods sold 650,000 575,000 Gross profit 252,000 225,000 Operating expenses 191,000 165,000 $ 61,000 $ 60,000 Net income Additional information: Inventory at the beginning of 2021 was $115,000. 1. Accounts receivable (net) at the beginning of 2021 were $89,000. 2. Total assets at the beginning of 2021 were $633,000. 3. 4. No common stock transactions occurred during 2021 or 2022. All sales were on account. 5. (a1) Compute the liquidity and profitability ratios of Oriole Company for 2021 and 2022. (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to 0 decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) % Change 2021 2022 LIQUIDITY Current ratio :1 :1 1.91 1.78 -6 Accounts receivables turnover times times Inventory turnover times times % Change 2021 2022 PROFITABILITY Profit margin Asset turnover times times Return on assets Earnings per share (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to 0 decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) Situation Ratio Return on common 18,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $54,000. 1. stockholders' equity Debt to assets ratio All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total 2. assets on December 31, 2023, were $903,000. Price-earnings ratio The market price of common stock was $9 and $13 on December 31, 2022 and 2023, respectively. 3. % Change 2022 2023 Return on common stockholders' equity Debt to assets ratio Price earnings ratio times times
