Problem 9-4 The following financial information is for Pharoah Company, 2016 $ 68,000 PHAROAH COMPANY Balance Sheets December 31 Assets 2017 Cash $ 71,000 Debt investments (short-term) 55,000 Accounts receivable 109,000 Inventory 237,000 Prepaid expenses 23.000 Land 135,000 Building and equipment (net) 263,000 Total assets $893,000 Liabilities and Stockholders' Equity Notes payable 5171,000 Accounts payable 65.000 Accrued liabilities 42.000 Bonds payable, due 2020 250.000 Common stock, 510 par 202.000 Retained earnings 163.000 Total liabilities and stockholders' equity 5893.000 42,000 90,000 166.000 23,000 135,000 183,000 $707.000 $110.000 50,000 42,000 170.000 202.000 133.000 $707.000 DUARONA CES PHAROAH COMPANY Income Statements For the Years Ended December 31 2017 2016 Sales revenue $890,000 $789,000 Cost of goods sold 647,000 574,000 Gross profit 243.000 215.000 Operating expenses 192.000 165.000 Net income $ 51,000 $ 50.000 dy Additional information 1. Inventory at the beginning of 2016 was $116.000. 2. Accounts receivable (nat) at the beginning of 2016 were $80,000. 3. Total assets at the beginning of 2016 were $642,000. 4. No common stock transactions occurred during 2016 or 2017 5. All sales were on account. gnment Compute the liquidity and profitability ratios of Pharoah Company for 2016 and 2017. (Round current ratio, earnings per share and asset turnover to 2 decir place, .g. 1.8 or 1.896. If % change is a decrease show the numbers as negative, e.g.-1.839 or (1.8396).) 2017 2016 % Change LIQUIDITY Current ratio 11 11 96 Accounts receivables turnover times times Inventory turnover times times 2017 2016 9 Change PROFITABILITY Profit margin 96 % Asset turnover times times Return on assets 36 % 2 Earnings per share $ The following are three independent situations and a ratio that may be afected. For each ustion, compute the affected ratie (t) as of December 31, 2017, and (2) as of December 31, 2018. after ging effect to the situation (Round all answers to I decimal places, L. 1. change is a decrease show the numbers as negative e or(1.4.1)) Situation Ratio 1. 19,000 shares of common stock were sold at par on July 1, 2018. Net Income for 2016 was $54,000 Return on common stockholders 2. All of the nobes payable were paid in 2018. All other labities remained at the same levels as December 31, 2010. A December 31, 2018, tatal assets were $877.000. Del to assestatio 3. The market price of common stock was 59 and 513 on December 31, 2017 and 2018, respectively income for 2018 was $54,000. Price earning ati 2018 2017 Change Return on common stockholders' equity Debt to assets ratio Price camins ratio times times Click if you would like to show Work for this question and
