question 13-23B
Assets Current assets Cash $118,000 $ 91,000 Marketable securities 24,000 18,000 Accounts receivable (net) & 112,000 108,000 Inventories 180,000 192,000 Prepaid expenses 27,000 14,000 . Total current assets 461,000 423,000 Investments 120,000 Plant (net) 120,000 260,000 Other 254,000 81,000 74,000 Total assets $922,000 $871,000 continued Year 4 Year 3 Liabilities and Stockholders' Equity Liabilities Current liabilities $ 20,000 $ 15,000 Notes payable 80,000 38,000 Accounts payable 9.000 Other 66,000 62,000 . Total current liabilities . 166,000 Noncurrent liabilities 110,000 210,000 Bonds payable 12,000 Other 26,000 222,000 Total noncurrent liabilities 136,000 302,000 284,000 .Total liabilities Stockholders' equity Preferred stock ($100 par, 4% cumulative, non- participating; $100 liquidating value; 1,000 shares 100,000 authorized and issued; no dividends in arrears) 100.000 Common stock (no par; 50,000 shares authorized; 12,000 shares issued) 240,000 240,000 Retained earnings 280,000 247,000 Total stockholders' equity 620,000 587,000 Total liabilities and stockholders' equity $922,000 $871,000 BEDFORD APPLIANCES INC. Statements of Income and Retained Earnings For the Years Ended December 31 Year 4 Year 3 Revenues Sales (net) $240,000 $230,000 Other revenues 7,000 4.000 Total revenues 247,000 234.000 ~ Expenses . Cost of goods sold 143,000 130,000 Selling, general, and administrative 46,000 57,000 Bond interest expense 7,000 10,000 Income tax expense 8,000 14,000 Total expenses 204,000 211,000 Net income 43,000 23,000 Retained earnings, January 1 247,000 234,000 Less: Preferred stock dividends 4,000 4,000 Common stock dividends 6,000 6,000 Retained earnings, December 31 $280,000 $247,000 Required Calculate the following ratios for Year 4 by rounding to two decimal points: Working capital. 595 CURRENT ASSETS - CURRENT LIABILITIES Current ratio. 596 CURRENT ASSETS + CURRENT LIABILITIES V Quick ratio. 596 Quick ASSETS & CURRENT LIABEITIES V Accounts receivable turnover. $1 NET CREAM SALES + AVERAGE ACCOUNTS RECIEVALLE Average days to collect accounts receivable. 51% 365 DAYS - Accounts RECIEveLE Inventory turnover. 594 COST OF GOODS SOLD AVERAGE INVENTORY V Average days to sell inventory. 59 365 DAYS : INVENTORY TURNOUTERY Debt-to-assets ratio. 549 TOTAL LIABILITIES + TOTAL ASSETSY Debt-to-equity ratio. 599 TOTAL LIADICITES TOTAL STOCK HOLDER EQUITY Times interest was earned. 600 EBIT : INTEREST EXPENSE Plant assets to long-term debt. Got NET NET SALES Net margin. 601 NET INCOME & Turnover of assets. NET SALES AVERAGE TOTAL ASSETS Return on investment. P. 602 NET INCpun AVERAGE TOTAL ASSETS Return on equity. 603 NET INCOME ' : AUTERAGE TOTAL STOCKHOLDERS Earnings per share. bob NET EARNINGS AVAILIBLE FOR COMMON STOCK; AVE II Book value per share. GO) -604 STOCKHOLDERS QUITY - PREFRARED STOCK + OUTSTAN Price-earnings ratio (market price: $13.26). 604/ MARKET PRICE PAR SHACK = EAR Dividend yield on common stock. 605 JDIVIDENDS PER SHARE : MARKET
