Problem 17-7A Calculation of financial statement ratios LO4

Alberta Playground Inc. produces, markets, distributes, and installs durable playground equipment. It is a new, growing playground distributor in Canada, and is hoping to expand to other provinces shortly. Its head office is in Edmonton, Alberta, and its 2020 and 2019 balance sheets and income statements follow.

Assume the common shares represent 205,430 (thousand) shares issued and outstanding for the entire year ended March 31, 2020. Required: 1. Prepare a common-size balance sheet and income statement on a comparative basis for 2019 and 2020.

2. Calculate the 2020 ratios for Alberta Playground Inc. including a comparison against the industry averages.

Problem 17-7A Calculation of financial statement ratios L04 4 40 points 8 04:56:02 References Alberta Playground Inc. produces, markets, distributes, and installs durable playground equipment. It is a new growing playground distributor in Canada, and is hoping to expand to other provinces shortly. Its head office is in Edmonton, Alberta, and its 2020 and 2019 balance sheets and income statements follow. Alberta Playground Inc. Balance Sheet (5000) Years Ended March 31 2020 2019 Assets Current assets Cash and cash equivalents $ 79,0915 56,419 Receivables 462,487 368,669 Inventories 666,194 570,754 Prepaid expenses and other assets 51,420 29,974 Non-strategic investment 28,063 320 Other current assets 33,483 28,722 Total current assets $1,320,578 $1,654,858 Portfolio investment 41,343 Property, Plant, & Equipment 1,891,150 1, 102,756 Goodwill 854,230 723,095 Trademarks and other intangibles 343,838 321,413 Other assets 140,593 96,066 Total assets $3,750,389 53,339,531 Liabilities Current liabilities Bank loans $ 172,189 $ 63,172 Accounts payable and accrued liabilities 576,179 473,506 Income taxes payable 200,238 150,977 Current portion of long term debt 28,519 8,952 Total current liabilities $ 977,125 $ 696,614 Non-Current Liabilities Long-tern debt 381,680 383,990 Other liabilities 190.583 154,969 Total liabilities $1,549,388 51,235,573 Equity Common shares $ 633,675 $ 600,749 Retained earnings 1,567,326 1,503,209 Total equity $2,201,001 $2,103,958 Total liabilities and equity $3,750,389 53,339,531 Alberta Playground Inc. Income Statement (5000) Years Ended March 31 Revenues Cost of sales, selling and administrative expenses Depreciation and amortization expense Operating profit Interest on long-term debt Other expenses Earnings before income taxes Income taxes Profit 2020 2019 $ 6,185,470 $5,970,582 5,267,330 5,150,511 108,832 117,506 809,308 702,565 23,691 30,381 15,863 6,761 769,754 665,423 204,715 168,789 $ 565,039 $ 496,634 Assume the common shares represent 205,430 (thousand) shares issued and outstanding for the entire year ended March 31, 2020 Required: 1. Prepare a common-size balance sheet and income statement on a comparative basis for 2019 and 2020. (Round the final percentage answers to 2 decimal places. Negative answers should be indicated by a minus sign.)