SIMARIA Requirements 1. Compute the following rutins for the companies for the current year a. Acid-test ratio e. Iarnings per share of common b. Inventory turnover stock c. Dus'sales in receivables 1. Price/earning natio d. Del mio Dividend payout 2. Decide which company's stock better fits your investment strategy P15.29A Completing a comprehensive financial statement analysis In its annual report, ABC Athletic Supply, Inc. includes the following five-year financial summary Learning Objectives 2.4 3.2018. Inventory turnover 8.04 2013 (30) ABC ATHLETIC SUPPLY, INC. Five Year Financial Summary (Partial; adapted) (Dollar amounts in thousands except per share data) 2018 2017 2016 2015 2014 Net Sales Revenue $ 250,000 $216,000 5 191,000 $ 161,000 $134,000 Net Sales Revenue increase 16% 13% 19% 20% 17% Domestic Comparative Store Sales Increase 5% 6% 456 7% 9% Other Income Net 2.110 1,840 1 ,760 1,690 1,330 Cost of Goods Sold 189,250 164,592 148.216 126,385 106,396 Selling and Administrative Expenses 41,210 36,330 3 1,620 27,440 22,540 Interest: Interest Expense 11,080) (1,380) (1.400) (1,020) Interest Income 125 165 190 Income Tax Expense 4.470 3.900 3,700 3,320 2.700 Net Income 16,225 11,8037 .9794 ,760 3,054 Per Share of Commen Stock: Net Income 1.60 1.30 1.20 1.00 0.78 Dividends 0,40 0.38 0.34 0.30 0.26 Financial Position Current Assets, Excluding Merchandise Inventory $30,700 $ 27.200 $26,700 524,400 $ 21,500 Merchandise Inventory 24,500 22,600 21,700 19.000 17.500 Property, Plant, and Equipment, Net 51,400 45,200 40,000 35,100 25,600 Total Assets 106,600 95,000 $8,400 78,500 64,600 Current Liabilities 32,300 28,000 28,300 25,000 16,500 Long term Debt 23,000 21,500 17.600 19,100 12.000 Stockholders Equity 51,300 45,500 42,500 34,400 36.100 Financial Ratios Acid Test Ratio 1.0 0.0 0.9 10 13 Rate of Retum on Total Assets 17.2% 14.4 11.2% 3.1% 7.1% Rate of Return on Common Stockholders' Equity 33.5% 26.84 20.89 13.54 13.0% $ 16,700 Digitalized Every Zone Net Sales Revenue (all on credit) $ 423,035 $493,845 Cost of Goods Sold 210,000 260,000 Interest Expense 19,000 Net Income 51,000 72,000 Selected balance sheet and market price data at the end of the current year: Digitalized Every Zone Current Assets: Cash 24,000 $ 17,000 Short-term Investments 40,000 14,000 Accounts Receivable, Net 40,000 48,000 Merchandise Inventory 66,000 97,000 Prepaid Expenses 23,000 12,000 Total Current Assets $ 193,000 $ 188,000 Total Assets $ 266,000 $ 323,000 Total Current Liabilities 105,000 96,000 Total Liabilities 105,000 128,000 Common Stock: $1 par (12,000 shares) 12,000 $1 par (17,000 shares) 17,000 Total Stockholders' Equity 161,000 195,000 Market Price per Share of Common Stock 76.50 114.48 Dividends Paid per Common Share 1.10 1.00 Selected balance sheet data at the beginning of the current year: Digitalized Every Zone Balance Sheet: Accounts Receivable, net Merchandise Inventory Total Assets Common Stock: $1 par (12,000 shares) S1 par (17,000 shares) $ 41,000 81,000 261,000 $ 54,000 87,000 272,000 12,000 17,000 that U ULISIU Lepends CCU DIT stock Requirements 1. Compute the following ratios for both companies for the current year: a. Acid-test ratio c. Earnings per share of common b. Inventory turnover c. Days' sales in receivables f. Price/earnings ratio d. Debt ratio g. Dividend payout 2. Decide which company's stock better fits your investment strategy