The comparative statements of Osborne Company are presented here.

OSBORNE COMPANY

Income Statement

For the Years Ended December 31

2014 2013

Net Sales $1,890,540 $1,750,500

Cost of goods sold 1,058,540 1,006,000

Gross Profits 832,000 744,500

Selling and administrative expense 500,000 479,000

Income from operations 332,000 265,500

Other expenses and losses

Interest expense 22,000 20,000

Income before income taxes 310,000 245,500

Income tax expense 92,000 73,000

Net Income $218,000 $172,500

OSBORNE COMPANY

Balance Sheets

December 31

Assets 2014 2013

Current assets

Cash $60,100 $64,200

Debt investments (short-term) 74,000 50,000

Accounts receivable 117,800 102,800

Inventory 126,000 115,500

Total current assests 377,900 332,500

Plant assets (net) 649,000 520,300

Total assets $1,026,900 $852,800

Liabilities and Stockholders? Equity

Current Liabilities

Accounts payable $160,000 $145,400

Income taxes payable 43,500 42,000

Total current liabilities 203,500 187,400

Bonds Payable 220,000 200,000

Total liabilities 423,500 387,400

Stockholders? equity

Common stock ($5 par) 290,000 300,000

Retained earnings 313,400 165,400

Total stockholders? equity 603,400 465,400

Total liabilities and stockholders? equity $1,026,900 $852,800

All sales were on account. Net cash provided by operating activities for 2014 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

Instructions:

Compute the following ratios for 2014.

Earnings per share. h) Days in inventory.

Return on common stockholders? equity i) Times interest earned

Return on assets. j) Asset turnover

Current ratio. k) Debt to assets

Accounts receivable turnover l) Current cash debt coverage

Average collection period m) Cash debt coverage

Inventory turnover. n) Free cash flow

P132A The comparative statements of Osborne Company are presented here. OSBORNE COMPANY Income Statement For the Years Ended December 31 2014 2013 Net Sales $1,890,540 $1,750,500 Cost of goods sold 1,058,540 1,006,000 Gross Profits 832,000 744,500 Selling and administrative expense 500,000 479,000 Income from operations 332,000 265,500 Other expenses and losses Interest expense 22,000 20,000 Income before income taxes 310,000 245,500 Income tax expense 92,000 73,000 Net Income $218,000 $172,500 OSBORNE COMPANY Balance Sheets December 31 Assets 2014 2013 Current assets Cash $60,100 $64,200 Debt investments (shortterm) 74,000 50,000 Accounts receivable 117,800 102,800 Inventory 126,000 115,500 377,900 332,500 Plant assets (net) 649,000 520,300 Total assets $1,026,900 $852,800 Accounts payable $160,000 $145,400 Income taxes payable 43,500 42,000 Total current assests Liabilities and Stockholders' Equity Current Liabilities Total current liabilities 203,500 187,400 220,000 200,000 423,500 387,400 Common stock ($5 par) 290,000 300,000 Retained earnings 313,400 165,400 603,400 465,400 $1,026,900 $852,800 Bonds Payable Total liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity All sales were on account. Net cash provided by operating activities for 2014 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000. Instructions: Compute the following ratios for 2014. a) Earnings per share. h) Days in inventory. b) Return on common stockholders' equity i) Times interest earned c) Return on assets. j) Asset turnover d) Current ratio. k) Debt to assets e) Accounts receivable turnover l) Current cash debt coverage f) m) Cash debt coverage Average collection period g) Inventory turnover. n) Free cash flow