Question
The condensed financial statements of Gobbledygook Inc. for the years 2013 and 2014 are as listed. GOBBLEDYGOOK INC. Balance Sheets December 31 (in thousands) 2014
The condensed financial statements of Gobbledygook Inc. for the years 2013 and 2014 are as listed.
GOBBLEDYGOOK INC. Balance Sheets December 31 (in thousands) |
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| 2014 |
| 2013 |
Current assets |
|
|
|
|
Cash and cash equivalents |
| $316 |
| $378 |
Accounts receivable (net) |
| 660 |
| 590 |
Inventory |
| 510 |
| 440 |
Prepaid expenses |
| 130 |
| 160 |
Total current assets |
| 1,616 |
| 1,568 |
Investments |
| 200 |
| 200 |
Property, plant, and equipment (net) |
| 424 |
| 380 |
Intangibles and other assets |
| 530 |
| 492 |
Total assets |
| $2,770 |
| $2,640 |
Current liabilities |
| $1,010 |
| $980 |
Long-term liabilities |
| 530 |
| 430 |
Stockholders equitycommon |
| 1,230 |
| 1,230 |
Total liabilities and stockholders equity |
| $2,770 |
| $2,640 |
GOBBLEDYGOOK INC. Income Statements For the Year Ended December 31 (in thousands) |
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|
|
|
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| 2014 |
| 2013 |
Sales revenue |
| $3,850 |
| $3,510 |
Costs and expenses |
|
|
|
|
Cost of goods sold |
| 1,159 |
| 1,092 |
Selling & administrative expenses |
| 2,400 |
| 2,330 |
Interest expense |
| 10 |
| 20 |
Total costs and expenses |
| 3,569 |
| 3,442 |
Income before income taxes |
| 281 |
| 68 |
Income tax expense |
| 112 |
| 27 |
Net income |
| $ 169 |
| $ 41 |
Calculate the following ratios for 2014 and 2013. (Round current ratio and inventory turnover to 2 decimal places.)
(a) | Current ratio. |
(b) | Inventory turnover. (Inventory on December 31, 2012, was $400.) |
(c) | Profit margin. |
(d) | Return on assets. (Assets on December 31, 2012, were $2,300.) |
(e) | Return on common stockholders equity. (Equity on December 31, 2012, was $950.) |
(f) | Debt to assets ratio. |
(g) | Times interest earned. |
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