P & B Manufacturing P & B Manufacturing Comparative Balance Sheet Income Statement (dollars in millions) For Year Ended December 31 Ending Balance Beginning Balance (dollars in millions) Assets Current assets: Sales 4,450 Cash and cash equuvalents Cost of goods sold 3,550 Accounts Receivable Gross Margin 900 Inventory Selling and administrative expenses 820 Total current assets . Netope rating income 80 Property, plant and eqUIpme'nt NonoperatingitemszGain on sale of equipment 4 Less accumulated depreciation Income before taxes 84 Net property, plant and equipment Income taxes 29 Total assets Net Income 55 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable 1 The company sold equipment that had an original cost of $15 million and P & B Manufacturing also provided the following information: Total current liabilities accumulated depreciation of $9 million. The cash proceeds from the sale Bonds payable were $11 million. The gain on the sale was $4 million. Total liabilities 2 The company did not issue any new bonds during the year Stockholders' equity: Common stock Retained earnings 4 The company did not complete any common stock transactions during Total stockholders' equity the year Total liabilities and stockholders' equity 3 The company paid a cash dividend during the year Required: 1. Using the indirect method, prepare a Statement of Cash Flows for the year 2. To help P & B Manufacturing assess its liquidity at the end of the year calculate the following: a. Current ratio b. Acid-test (quick) ratio 3. To help P & B Manufacturing assess its asset management calculate the following: a. Average collection period (assuming all sales are on account) b. Average sale period 4. To help P & B Manufacturing assess its debt management calculate the following: a. Debt-to-equity ratio at the end of the year b. Equity multiplier 5. To help P & B Manufacturing assess its profitability calculate the following a. Net profit margin percentage b. Return on equity 6. To help P & B Manufacturing assess its market performance, calculate the following (assume the par value of the company's common stock is $10 per share) a. Earnings per share b. Dividend payout ratio Parts 1 thru 6b 1 Green boxes have drop down menu's to choose from P & B Manufacturing Statement of Cash Flows (indirect method) For the Year Ended December 31 Up eruting Activities: Adjustments to convert net income to cash basis: Subtotal of Adjustments Net cash provided by operating activities Investing Activities: Net cash used in investing activities Financing Activities: Net cash used in financing activities Beginning cash and cash equivalents Ending cash and cash equivalents P & B Manufacturing Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance Assets Current assets: Cash and cash equivalents Accounts Receivable Inventory Total cu rre nt assets Property, plant and equipment Less accumulated depreciation Net property, plant and equipment 65 91 Total a sse ts Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities 180 94 180 105 Income taxes payable Total current liabilities 346 373 Bonds payable Total liabilities Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders'equity 526 683 P & B Manufacturing Income Statement ForYear Ended December 31 (dollars in millions) Sales Cost of goods sold Gross Margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net Income 2a 2b 3a 3b 4a 4b 5a 5b 6a 6b To assess the liquidity at the end of the year calculate Current Ratio and Acid-test (quick). Round your answers to 2 decimal ulaces - or exam le 5.67 Calculate the Current Ratio - Calculate the Acid-text (quick) ratio - To assess asset management calculate Average collection period and Average sale period Round your answers to 2 decimal places Calculate Average collection period - assume all sales are on account - Calculate Average sale period - use 365 days in a year. To assess debt management calculate Debt-to-Equity ratio at the end of the year and Equity Multiplier. Round your calculations & answers to 2 decimal places Calculate Debt-to-Equity ratio - Calculate Equity multiplier To assess profitability calculate Net Profit Margin Percentage and Return on Equity. Round your calculations & answers to 2 decimal place Calculate Net profit margin percentag. Both 5a and 5b are to be expressed as a percent. Research if 0U are unsure hGW t0 ex-ress 0 number 05 L7 :ercent. Calculate Return on equity percentage - To assess market performance, calculate Earnings Per Share and Dividend Payout Ratio. Assume the par value of the company's common stock is $10 per share Round your calculations & answers to 2 decimal places Calculate Earnings per share. Express in dollars and cents - Calculate Dividend payout ratio - express in a percent. Assume the par value of the company's common stock is 510 per share Additions to property, plant & equipment Beginning cash & cash equivalents Cash dividends Decrease in accounts receivable Decrease in accrued liabilities Decrease in income taxes payable Depreciation Ending cash & cash equivalents Gain on sales of equipment Increase in accounts payable Increase in inventory Proceeds from sale of equipment Retired bonds payable