Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year $ 5,400,000 $ 4,590,000 3,530,000 1,060,000 564,000 496,000 78,000 418,000 125,400 292,600 97,000 195,600 665,400 $ 1,231,600 $ 861,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings 3,955,000 1,445,000 669,000 776,000 78,000 698,000 209,400 488,600 118,000 370,600 861,000 During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 2/10, n/30. All sales are on account. Required 1. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year: a. The amount of working capital b. The current ratio C. The acid-test ratio d. The average collection period. (The accounts receivable at the beginning of last year totaled $330,000.) e. The average sale period. (The inventory at the beginning of last year totaled $580,000.) f. The operating cycle g. The total asset turnover. (The total assets at the beginning of last year were $2,660,000.) h. The debt-to-equity ratio i. The times interest earned ratio j. The equity multiplier. (The total stockholders' equity at the beginning of last year totaled $1,621,000.) 2. For both this year and last year: a. Present the balance sheet in common-size format. b. Present the income statement in common-size format down through net income Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year: a. The amount of working capital b. The current ratio. (Round your answers to 2 decimal places.) c. The acid-test ratio. (Round your answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $330,000.) (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) e. The average sale period. (The inventory at the beginning of last year totaled $580,000.) (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) g. The total asset turnover. (The total assets at the beginning of last year were $2,660,000.) (Round your answers to 2 decimal places.) h. The debt-to-equity ratio. (Round your answers to 2 decimal places.) i. The times interest earned ratio. (Round your answers to 2 decimal places.) j. The equity multiplier. (The total stockholders' equity at the beginning of last year totaled $1,621,000.) (Round your answers to 2 decimal places.) Show lessA This Year Last Year a. Working capital b. Current ratio c. Acid-test ratio d. Average collection period e. Average sale period f. Operating cycle g. Total asset turnover h. Debt-to-equity ratio i. Times interest earned ratio j. Equity multiplier days days days days days days Req 1 Req 2A Req 2B Present the balance sheet in common-size format. (Round your answers to 1 decimal place.) Sabin Electronics Common-Size Balance Sheets This Year Last Year Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Bonds payable, 12% Total liabilities Stockholders' equity: Common stock, $15 par Retained earnings Total stockholders' equity Total liabilities and equity Req 2A Req 1 Req 2B Present the income statement in common-size format down through net income. (Round your answers to 1 decimal place.) Sabin Electronics Common-Size Income Statements This Year Last Year Sales Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income