Question: 9 Golden Services is a service provider company it's activity mally in hospitality services and it is a listed company that was established in the year 2000. The followings are the financial statements related to the year 2019 prepared with a comparative figure from the year 2018. 10 AR 11 12 Golden Services Company 13 Comparative Statements of Financial Position 14 December 31 15 2019 2018 16 Assets 17 Property, plant and equipment (net) $ 260,000 $ 300,000 18 Inventory 50,000 70,000 19 Accounts receivable (net) 50,000 30,000 20 Short-term investments 15,000 60,000 21 Cash 25,000 40,000 22 Total assets $ 400,000 $ 500.000 23 Equity and liabilities 24 Share capital-ordinary $ 150,000 $ 150,000 25 Retained earnings 110,000 70,000 26 Bonds payable 80,000 160,000 27 Accounts payable 20,000 30,000 28 Short-term notes payable 40,000 90,000 29 Total equity and liabilities $ 400.000 $ 500.000 30 31 32 Golden Services Company 33 Comparative Income Statement 34 December 31 35 2019 2018 36 Net sales $ 400,000 $ 350,000 37 Cost of goods sold 240,000 210,000 38 Gross profit 160,000 140,000 39 Operating expenses 42,000 40,000 40 Income from operations 118,000 100,000 41 Interest expense 18,000 16,000 42 Income before income taxes 100,000 84,000 43 Income tax expense 30,000 25.500 44 Net Income $ 70,000 58.500 45 46 47 48 Additional information: 49 a.Cash dividends of $23,000 were dedared and paid in 2019 while in 2018 they distributed $25,000 50 b.Weighted average number of ordinary shares outstanding during 2019 was 30,000 shares and 10,000 shares in 2018 51 c Market value of ordinary shares on December 31, 2019, was $21 per share while in 2018 it was $20.5 52 c.Account Receivable for the year 2017 was 20,000 53 e.Inventory in 2017 was $75,000 54 f.Total Assets in 2017 $550,000 55 56 Instructions: 57 1. Apply the trend analysis horizontal) and common size analysis (vertical) on the financial statements and analyze your answer. 58 2. Using the financial statements and Sditional information, compute the following ratios for Golden Services Company for 2018 and 2019. 59 3. You are requested to develop a good understanding of the performance of the firm by interpreting the results of the ratios 60 all computations 61 Ratios: 62 Current ratio 63 Debt to total asset ratio 64 Inventory turnover 65 Acid-test ratio 66 Accounts receivable turnover 67 Average collection period 68 Times interest earned 69 Profit margin 70 Days in inventory 71 Payout ratio 72 Return on assets 73 Asset Turnover 74 Payout ratio 75 76
