Question 1 of 1 1.8/6 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. The following financial information is for Sandhill Company. SANDHILL COMPANY Balance Sheets December 31 Assets 2022 2021 Cash $ 69,000 $ 66,000 50,000 42,000 Debt investments (short-term) Accounts receivable 106,000 92,000 Inventory 238,000 166,000 Prepaid expenses 25,000 24,000 Land 132.000 132,000 Building and equipment (net) 264,000 184,000 Total assets $884,000 $706,000 Liabilities and Stockholders' Equity Notes payable $169,000 $ 105,000 Accounts payable 68,000 51,000 Accrued liabilities 42.000 42,000 Bonds payable, due 2025 252,000 169.000 Common stock, $10 par 209,000 209,000 Retained earnings 144,000 130,000 Total liabilities and stockholders' equity $884,000 $706,000 SANDHILL COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $888.000 $782.000 Cost of goods sold 640.000 576,000 Gross profit 248.000 206.000 Operating expenses 195.000 158.000 Net income $ 53.000 $ 48,000 Additional information: 1. Inventory at the beginning of 2021 was $116,000. 2. Accounts receivable (net) at the beginning of 2021 were $88,000. 3. Total assets at the beginning of 2021 were $642.000. 4 No common stock transactions occurred during 2021 or 2022. 5. All sales were on account. (a1) Compute the liquidity and profitability ratios of Sandhill Company for 2021 and 2022. (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 2021 2022 % Change LIQUIDITY Current ratio :1 :1 -11 % Accounts receivables turnover times times 3 % Inventory turnover times times -22 % 2021 2022 % Change FITABILITY tmargin 6 % % -3 % tturnover times times -4 % rn on assets % % % ngs per share $ $ 10 % (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to decimal places, eg. 15 and round all other answers to 1 decimal place, eg. 15.5. Round % change to decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g.-1% or (1%).) Situation Ratio Situation Ratio 1. 19,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $52,000. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $868,000. The market price of common stock was $9 and $12 on December 31, 2022 and 2023, respectively. Return on common stockholders' equity Debt to assets ratio 2. 3. Price-earnings ratio 2022 2023 % Change % % % Return on common stockholders' equity Debt to assets ratio Price earnings ratio % -31 % 3.5 times times % e Textbook and Media Assistance Used Attempts: 1 of 2 used Submit Answer Save for Later Last saved 10 minutes ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes
