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PART 3 OF THE QUESTION Basic Financial Ratios The accounting staff of CCB Enterprises has completed the financial statements for the 2017 calendar year. The
PART 3 OF THE QUESTION
Basic Financial Ratios
The accounting staff of CCB Enterprises has completed the financial statements for the 2017 calendar year. The statement of income for the current year and the comparative statements of financial position for 2017 and 2016 follow.
CCB Enterprises | |
Statement of Income | |
For the Year Ended December 31, 2017 | |
(thousands omitted) | |
Revenue: | |
Net sales | $809,620 |
Other | 59,500 |
Total revenue | $869,120 |
Expenses: | |
Cost of goods sold | $536,240 |
Research and development | 24,360 |
Selling and administrative | 154,000 |
Interest | 19,580 |
Total expenses | $734,180 |
Income before income taxes | $134,940 |
Income taxes | 53,976 |
Net income | $80,964 |
CCB Enterprises | ||
Comparative Statements of Financial Position | ||
December 31, 2017 and 2016 | ||
(thousands omitted) | ||
2017 | 2016 | |
Assets | ||
Current assets: | ||
Cash and short-term investments | $25,810 | $21,140 |
Receivables, less allowance for doubtful accounts | ||
($1,070 in 2017 and $1,370 in 2016) | 47,810 | 50,060 |
Inventories, at lower of FIFO cost or market | 65,180 | 62,160 |
Prepaid items and other current assets | 5,170 | 2,980 |
Total current assets | $143,970 | $136,340 |
Other assets: | ||
Investments, at cost | $105,890 | $105,890 |
Deposits | 10,030 | 8,300 |
Total other assets | $115,920 | $114,190 |
Property, plant, and equipment: | ||
Land | $11,770 | $11,770 |
Buildings and equipment, less accumulated depreciation | ||
($126,980 in 2017 and $121,620 in 2016) | 267,510 | 248,280 |
Total property, plant, and equipment | $279,280 | $260,050 |
Total assets | $539,170 | $510,580 |
Liabilities and Owners Equity | ||
Current liabilities: | ||
Short-term loans | $22,270 | $24,240 |
Accounts payable | 72,260 | 71,060 |
Salaries, wages, and other | 26,290 | 26,840 |
Total current liabilities | $120,820 | $122,140 |
Long-term debt | $160,530 | $171,080 |
Total liabilities | $281,350 | $293,220 |
Owners equity: | ||
Common stock, at par | $44,170 | $41,810 |
Paid-in capital in excess of par | 63,700 | 60,890 |
Total paid-in capital | $107,870 | $102,700 |
Retained earnings | 149,950 | 114,660 |
Total owners equity | $257,820 | $217,360 |
Total liabilities and owners equity | $539,170 | $510,580 |
Required:
1. Calculate the following financial ratios for 2017 for CCB Enterprises:
Round items h, j, and k to the nearest whole number. Round all other answers to two decimal places. Assume a 360-day year.
i. Inventory turnover ratio (Assume that all purchases are on credit.) | ______ times |
j. Number of days' sales in inventory | _______ days |
k. Number of days in cash operating cycle | _________ days |
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