The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock
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The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 2017.
Stargel, Inc. | |||||
Comparative Retained Earnings Statement | |||||
For the Years Ended December 31, 2017 and 2016 | |||||
2017 | 2016 | ||||
Retained earnings, January 1 | 5,375,000 | 4,545,000 | |||
Add: net income | 900,000 | 925,000 | |||
Total | 6,275,000 | 5,470,000 | |||
Deduct dividends: | |||||
On preferred stock | 45,000 | 45,000 | |||
On common stock | 50,000 | 50,000 | |||
Total | 95,000 | 95,000 | |||
Retained earnings, December 31 | 6,180,000 | 5,375,000 | |||
Stargel, Inc. | |||||
Comparative Income Statement | |||||
For the Years Ended December 31, 2017 and 2016 | |||||
2017 | 2016 | ||||
Sales (all on account) | 10,050,000 | 9,450,000 | |||
Sales returns and allowances | 50,000 | 50,000 | |||
Net sales | 10,000,000 | 9,400,000 | |||
Cost of goods sold | 5,350,000 | 4,950,000 | |||
Gross profit | 4,650,000 | 4,450,000 | |||
Selling expenses | 2,000,000 | 1,880,000 | |||
Administrative expenses | 1,500,000 | 1,410,000 | |||
Total operating expenses | 3,500,000 | 3,290,000 | |||
Income from operations | 1,150,000 | 1,160,000 | |||
Other income | 150,000 | 140,000 | |||
1,300,000 | 1,300,000 | ||||
Other expense (interest) | 170,000 | 150,000 | |||
Income before income tax | 1,130,000 | 1,150,000 | |||
Income tax expense | 230,000 | 225,000 | |||
Net income | 900,000 | 925,000 | |||
Stargel, Inc. | |||||
Comparative Balance Sheet | |||||
December 31, 2017 and 2016 | |||||
Dec. 31, 2017 | Dec. 31, 2016 | ||||
Assets | |||||
Current assets: | |||||
Cash | 500,000 | 400,000 | |||
Marketable securities | 1,010,000 | 1,000,000 | |||
Accounts receivable, net | 740,000 | 510,000 | |||
Inventories | 1,190,000 | 950,000 | |||
Prepaid expenses | 250,000 | 229,000 | |||
Total current assets | 3,690,000 | 3,089,000 | |||
Long-term investments | 2,350,000 | 2,300,000 | |||
Property, plant, and equipment, net | 3,740,000 | 3,366,000 | |||
Total assets | 9,780,000 | 8,755,000 | |||
Liabilities | |||||
Current liabilities | 900,000 | 880,000 | |||
Long-term liabilities | |||||
Note payable, 8%, due 2020 | 200,000 | - | |||
Bonds payable, 10%, due 2025 | 1,500,000 | 1,500,000 | |||
Total long-term liabilities | 1,700,000 | 1,500,000 | |||
Total liabilities | 2,600,000 | 2,380,000 | |||
Stockholders' Equity | |||||
Preferred $.90 stock, $10 par | 500,000 | 500,000 | |||
Common stock, $5 par | 500,000 | 500,000 | |||
Retained earnings | 6,180,000 | 5,375,000 | |||
Total stockholders' equtiy | 7,180,000 | 6,375,000 | |||
Total liabilities and stockholders' equity | 9,780,000 | 8,755,000 |
Calculate the following ratios for both years: current ratio, average days to sell inventory (use ending inventory), debt to assets ratio, return on investment (use total assets), gross margin percentage, asset turnover (use ending asset balance), return on sales, and plant assets to long-term debt ratio. Include all formulas and intermediate calculations.
Related Book For
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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