P18-8B Cruz Burgers Inc.'s financial statements for the year ended December 31, 2020, are shown below: CRUZ BURGERS INC. Balance Sheet December 31, 2020 and 2019 od Prepe vertid stater stand for de ratios 2020 2019 Assets Cash Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Less: Accumulated amortization Goodwill Total assets Liabilities Accounts payable Note payable (due in 30 days) Mortgage payable Total liabilities Shareholders' equity $ 21,600 33,050 38,000 1,000 170,000 34,000 15,000 $244,650 $ 15,600 21,000 42,000 1,500 157.000 24,000 15,000 $228,100 $ 15,000 2,000 40,000 57,000 $ 18,500 3,500 45,000 67,000 48.000 48,000 Preferred shares (8,000 shares; $2.00, callable at $15.00 per share) Common shares (2020-12,000 shares; 20198,000 shares) Retained earnings Total shareholders equity Total liabilities and shareholders' equity 81,000 58,650 187,650 $244,650 65,000 48,100 161,100 $228,100 CH 5330.000 150.000 140.000 CRUZ BURGERS INC. Income Statement For the Year Ended December 31.2020 Net sales Cost of goods sold Gross margin Operating expenses Selling expenses Administrative expenses Interest expense Total operating expenses Operating income Income taxes (30%) Net income 40,000 23.000 6.000 69,000 71.000 21.300 CRUZ BURGERS INC Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 Add net income for 2020 548,100 49.700 97,800 Less dividends: Preferred Common Retained earnings, December 31, 2020 $16,000 23,150 39,150 558,650 Required 1. Perform a horizontal analysis of the comparative balance sheets. Round all answers to one decimal place. Comment on the analysis. 2. Perform a vertical analysis of the income statement. Round all answers to one decimal place. The industry standards are a gross margin of 45 percent and met income of 15 percent Comment on the analysis, 3. Calculate each of the following ratios for the year ended December 31, 2020, Round all answers to two decimal places. The industry standards are provided in parentheses for some of the ratios. a. Current ratio (2.17) 1. Return on sales b. Acid-test ratio k. Return on assets c. Inventory turnover 1. Return on common d. Days' sales in inventory shareholders' equity e. Accounts receivable turnover m. Price-earnings ratio--the f. Days' sales in receivables market price per share is 59.00 at year-end, when & Debt ratio (0.47) dividends were paid (14.001 h. Debt/equity ratio n. Dividend yield (4.15) 1. Times-interest-camned ratio 4. Comment on your calculations for Cruz Burgers Inc. Include comments for those ratios for which industry standards were provided. alysis of Accounting information P18-8B Cruz Burgers Inc.'s financial statements for the year ended December 31, 2020, are shown below: CRUZ BURGERS INC. Balance Sheet December 31, 2020 and 2019 od Prepe vertid stater stand for de ratios 2020 2019 Assets Cash Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Less: Accumulated amortization Goodwill Total assets Liabilities Accounts payable Note payable (due in 30 days) Mortgage payable Total liabilities Shareholders' equity $ 21,600 33,050 38,000 1,000 170,000 34,000 15,000 $244,650 $ 15,600 21,000 42,000 1,500 157.000 24,000 15,000 $228,100 $ 15,000 2,000 40,000 57,000 $ 18,500 3,500 45,000 67,000 48.000 48,000 Preferred shares (8,000 shares; $2.00, callable at $15.00 per share) Common shares (2020-12,000 shares; 20198,000 shares) Retained earnings Total shareholders equity Total liabilities and shareholders' equity 81,000 58,650 187,650 $244,650 65,000 48,100 161,100 $228,100 CH 5330.000 150.000 140.000 CRUZ BURGERS INC. Income Statement For the Year Ended December 31.2020 Net sales Cost of goods sold Gross margin Operating expenses Selling expenses Administrative expenses Interest expense Total operating expenses Operating income Income taxes (30%) Net income 40,000 23.000 6.000 69,000 71.000 21.300 CRUZ BURGERS INC Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 Add net income for 2020 548,100 49.700 97,800 Less dividends: Preferred Common Retained earnings, December 31, 2020 $16,000 23,150 39,150 558,650 Required 1. Perform a horizontal analysis of the comparative balance sheets. Round all answers to one decimal place. Comment on the analysis. 2. Perform a vertical analysis of the income statement. Round all answers to one decimal place. The industry standards are a gross margin of 45 percent and met income of 15 percent Comment on the analysis, 3. Calculate each of the following ratios for the year ended December 31, 2020, Round all answers to two decimal places. The industry standards are provided in parentheses for some of the ratios. a. Current ratio (2.17) 1. Return on sales b. Acid-test ratio k. Return on assets c. Inventory turnover 1. Return on common d. Days' sales in inventory shareholders' equity e. Accounts receivable turnover m. Price-earnings ratio--the f. Days' sales in receivables market price per share is 59.00 at year-end, when & Debt ratio (0.47) dividends were paid (14.001 h. Debt/equity ratio n. Dividend yield (4.15) 1. Times-interest-camned ratio 4. Comment on your calculations for Cruz Burgers Inc. Include comments for those ratios for which industry standards were provided. alysis of Accounting information
