SANDHILL COMPANY Balance Sheets December 31 Assets Cash Debt investments (short-term) Accounts receivable Inventory 2022 2021 $69.000 $ 66,000 50,000 42,000 106,000 92,000 238,000 166,000 25,000 24,000 132,000 132,000 264.000 184,000 $884.000 $706,000 Prepaid expenses Land Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities $169,000 $105,000 68,000 51.000 42,000 42,000 252,000 169,000 209.000 209.000 144.000 130,000 Bonds payable, due 2025 Common stock. $10 par Retained earnings Total liabilities and stockholders' equity $884,000 $706,000 SANDHILL COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue Cost of goods sold Gross profit $888.000 $782,000 640,000 576,000 248.000 206,000 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. (21) 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 Accounts receivables turnover times times Inventory turnover times times 2021 2022 % Change PROFITABILITY Profit margin Asset turnover times times Return on assets Earnings per share $ (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 0 decimal places, eg. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for eg. 1% and if % change is a decrease show the numbers as negative, e.g.-1% or (1%).) Situation Ratio 1. 19,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $52,000. Return on common stockholders' equity Debt to assets ratio 2. 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 3. The market price of common stock was $9 and $12 on December 31, 2022 and 2023, respectively. Price-earnings ratio 2022 2023 % Change Return on common stockholders' equity Debt to assets ratio Price earnings ratio times times Save for Later Last saved 3 minutes ago. Attempts: 0 of 2 used Submit
