Question
Question 4 Your answer is partially correct. Try again. The condensed financial statements of Wildhorse Co. for the years 2019 and 2020 are presented below.
Question 4
Your answer is partially correct. Try again. | |
The condensed financial statements of Wildhorse Co. for the years 2019 and 2020 are presented below.
WILDHORSE CO. Balance Sheets December 31 (in thousands) | ||||
2020 | 2019 | |||
Current assets | ||||
Cash and cash equivalents | $330 | $360 | ||
Accounts receivable (net) | 550 | 480 | ||
Inventory | 660 | 590 | ||
Prepaid expenses | 130 | 160 | ||
Total current assets | 1,670 | 1,590 | ||
Property, plant, and equipment (net) | 410 | 380 | ||
Investments | 90 | 90 | ||
Intangibles and other assets | 530 | 510 | ||
Total assets | $2,700 | $2,570 | ||
Current liabilities | $900 | $870 | ||
Long-term liabilities | 680 | 580 | ||
Stockholders equitycommon | 1,120 | 1,120 | ||
Total liabilities and stockholders equity | $2,700 | $2,570 |
WILDHORSE CO. Income Statements For the Year Ended December 31 (in thousands) | ||||
2020 | 2019 | |||
Sales revenue | $4,000 | $3,660 | ||
Costs and expenses | ||||
Cost of goods sold | 1,050 | 970 | ||
Selling & administrative expenses | 2,400 | 2,330 | ||
Interest expense | 10 | 20 | ||
Total costs and expenses | 3,460 | 3,320 | ||
Income before income taxes | 540 | 340 | ||
Income tax expense | 216 | 136 | ||
Net income | $ 324 | $ 204 |
Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.)
(a) | Current ratio. | |
(b) | Inventory turnover. (Inventory on December 31, 2018, was $350.) | |
(c) | Profit margin. | |
(d) | Return on assets. (Assets on December 31, 2018, were $2,780.) | |
(e) | Return on common stockholders equity. (Equity on December 31, 2018, was $980.) | |
(f) | Debt to assets ratio. | |
(g) | Times interest earned. |
2020 | 2019 | |||||
(a) Current ratio. | :1 | :1 | ||||
(b) Inventory turnover. | ||||||
(c) Profit margin. | % | % | ||||
(d) Return on assets. | % | % | ||||
(e) Return on common stockholders equity. | % | % | ||||
(f) Debt to assets ratio. | % | % | ||||
(g) Times interest earned. | times | times |
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