P ge Layout Ch 13 Ratios US Edition at March 9,19 Extra (1) Protected View Formulas Data Review View Help A B C D E F 1 2 3 4 6 7 B 9 10 11 12 13 14 15 16 17 18 19 20 21 H Search (Alt+Q) Before you begin, print out all the pages in this workbook. The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." page. Required: 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 2 From these ratios, analyze the financial performance of Dandy. yout Ch 13 Ratios US Edition at March 9.19 Extra (1) - Protected View Formulas Data Review View Help A B C D E F G H 1 2 3 Dandy Distributors Ltd. Income Statement For the Year Ended December 31, 2020 4 5 6 Sales, net 7 Less: Cost of goods sold Gross profit Search (Alt-0 K IME NI 2020 $21,133,000 2019 $19,442,360 16,061,080 14,970,617 5,071,920 4,471,743 8 9 Operating expenses 10 Selling 11 Salaries and benefits 841,000 832,590 12 Delivery 104,400 95,004 13 Office supplies 153,600 152,064 14 Warranty 422,660 431,113 15 Total selling 1,521,660 1,510,771 16 General and administrative 17 Bad debts 633,990 646,670 18 Depreciation 1,176,660 1,200,193 19 Professional fees 168,900 157,077 20 Total general and adminstrative 1,979,550 2,003,940 21 Total operating expenses 3,501,210 3,514,711 22 Income (loss) from operations 1,570,710 957,032 23 Other income (expenses) 24 Rent revenue 187,000 200,090 25 Income (loss) before interest and income taxes 1,757,710 1,157,122 26 Interest expense 682,245 668,600 27 Income (loss) before income taxes 28 Income taxes (recovered) 1,075,465 488,521 247,357 112,360 $828,108 $376,162 29 Net income (loss) 30 31 32 33 Dandy Distributors Ltd. Statement of Changes in Equity For the Year Ended December 31, 2020 34 2020 2019 35 Retained 36 37 Common stock Pref earnings stock 38 Balance (deficit) at Jan. 1 $652,000 $19,670 (deficit) $5,353,112 Total equity $6,024,782 Total equity $5,730,250 39 Stock issued 27,400 27,400 40 Net income (loss) 828,108 828,108 376,162 41 Cash dividends declared 42 Preferred (39,300) (39,300) (43,230) 43 Common (38,400) (38,400) (38,400) Required Fcl. Stmts. Fcl. Ratios BARALL ABC D E F G H M 45 46 47 48 49 50 Dandy Distributors Ltd.. Balance Sheet At December 31, 2020 Assets 51 Current 52 Cash 53 54 Accounts receivable, net Inventories 55 56 Plant assets 57 Land 58 Building, net 59 Patents, net 60 Goodwill 61 62 2020 $63,000 2019 $20,540 4,020,000 4,221,000 2,420,000 2,468,400 6,503,000 6,709,940 8,624,000 8,541,260 6,537,000 6,929,220 27,300 27,300 25,600 25,600 15,213,900 15,523,380 $21,716,900 $22,233,320 63 64 Liabilities 65 Current 66 67 Trade accounts payable Estimated current liabilities $698,000 117,600 $642,160 110,544 68 Estimated warranty liabilities 194,000 209,520 69 Note payable 24,200 70 Dividends payable 77,700 81,630 71 Interest payable 14,300 14,157 72 Salaries and benefits payable 90,000 89,100 73 Sales tax payable 23,000 23,920 741 Unearned rent 19,500 16,674 75 Current portion of mortgage payable 2,237,764 1,621,014 76 Corporate income taxes payable 11,110 11,443 77 3,507,174 2,820,163 78 Non-current 79 Mortgage payable 13,644,900 15,009,390 80 Less: Current portion (2,237,764) (1,621,014) 81 11,407,136 13,388,376 82 Total liabilities 14,914,310 16,208,538 83 84 Stockholders' Equity 85 Common stock, $1 per share 86 Preferred stock, $10 per share se 87 Retained earnings (deficit) 679,400 19,670 6.103.520 652,000 19,670 5.353.112 Required Fel: Stmts. Fel. Ratios yout Formulas Data Review View Help ABC D E F GH K L M 72 Salaries and benefits payable 90,000 89,100 73 Sales tax payable 23,000 23,920 74 Unearned rent 19,500 16,674 75 Current portion of mortgage payable 2,237,764 1,621,014 76 Corporate income taxes payable 11,110 11,443 77 3,507,174 2,820,163 78 Non-current 79 Mortgage payable 13,644,900 15,009,390 80 81 82 Less: Current portion Total liabilities (2,237,764) (1,621,014) 11,407,136 13,388,376 14,914,310 16,208,538 83 84 Stockholders' Equity 85 Common stock, $1 per share 679,400 652,000 86 Preferred stock, $10 per share 19,670. 19,670 87 Retained earnings (deficit) 6,103,520 5,353,112 6,802,590 6,024,782 88 89 Total liabilities and S/H equity $21,716,900 $22,233,320 90 David Annand: 91 92 93 Do not erase this cell. retained earnings. This calculates ending 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 e 114 Required Fel, Stmts. Fcl. Ratios PIGIA W 13 Ratios US Edition at March 9 19 Extra (1) - Protected View Formulas Data Review View Help B DE F Dandy Distributors Ltd. Selected Financial Ratios Search (Alt-0) 2020 industry Dandy's ratios average 2020 2019 2018 a. Current ratio 1.9 2.4 2.7 b. Acid-test ratio 1.2 1.5 1.7 c. Accounts rec. collection (days) 70 79 94 d. Days of sales in inventory 52 60 67 e. Revenue operating cycle [days) 122 139 167 f. Gross profit ratio 25.7% 23.0% 22.8% g. Operating profit ration 8.2% 4.9% 4.3% h. Net profit ration 4.3% 1.9% 1.6% 1. Sales to total assets ratio 1.0 0.9 0.7 j. Return on total assets ratio. 7.8% 4.2% 3.4% k. Return on s/h equity ratio, 14.2% 6.4% 5.2% 1. Debt to s/h equity ratio 4.1 2.7 3.0 m. Times interest earned 2.4 1.4 1.2 n. Earnings (loss) per common share $1.72 $0.51 $0.43 a. Price earnings ratio (given) 28 23 15 12 p. Dividend yield per common share (given) 5% 5% 5% 6% Required Fcl. Stmts. Fcl. Ratios Paste BIU A Merge & C Undo Clipboard Font 17 A B C D F G T Alignment J 1 Before you begin, print out all the pages in this workbook. 2 3 The financial statements of Dandy Distributors Ltd. are shown on the "Fcl. Stmts." 4 page. LA 5 6 7 8 00 9 10 11 Required: 1 Based on Dandy's financial statements, calculate ratios for the year ended December 31, 2020. Assume all sales are on credit. Show your work. 2 From these ratios, analyze the financial performance of Dandy. 12 13 14 15 16 ABC D E F GH S Sales, net 7 Less: Cost of goods sold 8 Dandy Distributors Ltd. Income Statement For the Year Ended December 31, 2020 K L M 2020 $21,133,000 2019 ########## 16,061,080 14,970,617 5,071,920 4,471,743 Gross profit 9 Operating expenses 10 Selling 11 Salaries and benefits 841,000 832,590 12 Delivery 104,400 95,004 13 Office supplies 153,600 152,064 14 Warranty 422,660 431,113 15 16 17 Total selling General and administrative Bad debts 1,521,660 1,510,771 633,990 646,670 18 Depreciation 1,176,660 1,200,193 19 Professional fees 168,900 157,077 20 Total general and adminstrative 1,979,550 2,003,940 21 Total operating expenses 3,501,210 3,514,711 22 Income (loss) from operations 1,570,710 957,032 23 Other income (expenses) Rent revenue 187,000 200,090 25 Income (loss) before interest and income taxes 1,757,710 1,157,122 26 Interest expense 682,245 668,600 28 27 Income (loss) before income taxes 29 Net income (loss) 1,075,465 488,521 Income taxes (recovered) 247,357 112,360 $828,108 $376,162 30 31 32 33 34 35 36 37 Dandy Distributors Ltd. Statement of Changes in Equity For the Year Ended December 31, 2020 2020 2019 Common stock Pref Retained earnings stock $19,670 (deficit) Total equity $5,353,112 27,400 $6,024,782 27,400 Total equity $5,730,250 828,108 828,108 376,162 38 Balance (deficit) at Jan. 1 $652,000 39 Stock issued 40 Net income (loss) 41 Cash dividends declared Required Fcl. Stmts. Accessibility: Investigate Ready Calculate Type here to search Fcl. Ratios R Paste BIUE 7 A I Undo Clipboard E Font ABC D E F G T K L M N 37 stock stock 39 Stock issued 42 38 Balance (deficit) at Jan. 1 $652,000 40 Net income (loss) 41 Cash dividends declared 43 Preferred Common 44 Balance (deficit) at Dec. 31 $679,400 $19,670 Dandy Distributors Ltd. Balance Sheet At December 31, 2020 $19,670 (deficit) $5,353,112 Total equity Total equity $6,024,782 $5,730,250 27,400 27,400 828,108 828,108 376,162 (39,300) (39,300) (43,230) (38,400) (38,400) (38,400) $6,103,520 $6,802,590 $6,024,782 45 46 47 48 49 50 Assets 51 Current 52 Cash 53 Accounts receivable, net 54 Inventories 55 56 Plant assets 57 Land 58 Building, net 59 Patents, net 60 Goodwill 61 62 63 64 Liabilities $21,716,900 2020 2019 $63,000 $20,540 4,020,000 4,221,000 2,420,000 2,468,400 6,503,000 6,709,940 8,624,000 8,541,260 6,537,000 6,929,220 27,300 27,300 25,600 25,600 15,213,900 15,523,380 ########## 65 Current 66 67 68 Trade accounts payable Estimated current liabilities Estimated warranty liabilities $698,000 $642,160 117,600 110,544 194,000 209,520 69 Note payable 24,200 70 Dividends payable 77,700 81,630 71 Interest payable 14,300 14,157 72 Salaries and benefits payable 90,000 89,100 73 Sales tax payable 23,000 23,920 74 Unearned rent 19,500 16,674 75 Current portion of mortgage payable 2,237,764 1,621,014 76 Corporate income taxes payable 77 Required Fcl. Stmts. 11,110 3,507.174 Fcl. Ratios 11,443 2,820,163 Ready Calculate Accessibility: Investigate Type here to search E Paste Calibri BIUV 12 Undo Clipboard ABC D E F G A Font $21,716,900 A A A K M Liabilities Current 7 Trade accounts payable Estimated current liabilities $698,000 $642,160 117,600 110,544 8 Estimated warranty liabilities 194,000 209,520 69 Note payable 24,200 70 Dividends payable 77,700 81,630 71 Interest payable 14,300 14,157 72 Salaries and benefits payable 90,000 89,100 73 Sales tax payable 23,000 23,920 74 Unearned rent 19,500 16,674 75 Current portion of mortgage payable 2,237,764 1,621,014 76 Corporate income taxes payable 11,110 11,443 77 3,507,174 2,820,163 78 Non-current 79 Mortgage payable 13,644,900 15,009,390 80 Less: Current portion (2,237,764) (1,621,014) 81 11,407,136 13,388,376 82 Total liabilities 14,914,310 16,208,538 83 84 Stockholders' Equity 85 Common stock, $1 per share 86 Preferred stock, $10 per share 679,400 19,670 652,000 19,670 87 Retained earnings (deficit) 6,103,520 5,353,112 6,802,590 6,024,782 88 89 Total liabilities and S/H equity $21,716,900 ########## 90 David Annand: 91 92 Do not erase this cell. This calculates ending retained earnings. 93 94 95 96 97 98 99 100 101 102 Required Fcl. Stmts. Fcl. Ratios Ready Calculate Accessibility: Investigate Type here to search AutoSave Off ile Home Insert Page Layout Formulas Data 2 7 Calibri Paste BIU Undo Clipboard A B C Font Ch 13 Ratios US Edition at March 9,19 Extra (2) Y Review View Help 12 AA 2 Wrap T V A Merge a 2 17 Alignment D E F G H Dandy Distributors Ltd. Selected Financial Ratios 2020 industry Dandy's ratios average 2020 2019 2018 a. Current ratio 1.9 2.4 2.7 1 12 13 14 15 18 16 17 b. Acid-test ratio c. Accounts rec. collection (days) d. Days of sales in inventory e. Revenue operating cycle (days) f. Gross profit ratio g. Operating profit ratio h. Net profit ratio i. Sales to total assets ratio j. Return on total assets ratio k. Return on s/h equity ratio 1. Debt to s/h equity ratio 1.5 1.7 79 60 139 167 266 94 67 23.0% 22.8% 4.9% 4.3% 1.9% 1.6% 0.9 0.7 4.2% 3.4% 6.4% 5.2% 217 3.0 19 m. Times interest earned 14 1.2 20 n. Earnings (loss) per common share $0.51 $0.43 o. Price earnings ratio (given) 28 213 15 12 23 p. Dividend yield per common share (given) 6% 6% 24 25 20 27 28 29 30 Ready Calculate Required festi Accessibility Investigate Type here to search Fel Ratios