Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The condensed financial statements of Murawski Company for the years 2019 and 2020 are presented follows. (Amounts in thousands.) MURAWSKI COMPANY Balance Sheets December 31

The condensed financial statements of Murawski Company for the years 2019 and 2020 are presented follows. (Amounts in thousands.)

MURAWSKI COMPANY Balance Sheets December 31

2020

2019

Current assets
Cash and cash equivalents $ 334 $ 365
Accounts receivable (net) 420 444
Inventory 392 476
Prepaid expenses 144 148
Total current assets 1,290 1,433
Investments 15 12
Property, plant, and equipment 350 426
Intangibles and other assets 518 544
Total assets $2,173 $2,415
Current liabilities $ 784 $ 894
Long-term liabilities 350 426
Stockholders equitycommon 1,039 1,095
Total liabilities and stockholders equity $2,173 $2,415

MURAWSKI COMPANY Income Statements For the Years Ended December 31

2020

2019

Sales revenue $3,730 $3,770
Costs and expenses
Cost of goods sold 866 956
Selling & administrative expenses 2,300 2,380
Interest expense 23 18
Total costs and expenses 3,189 3,354
Income before income taxes 541 416
Income tax expense 174 89
Net income $ 367 $ 327

Compute the following ratios for 2020 and 2019. (Round current ratio and invertory turnover ratio to 2 decimal places, e.g. 1.62 or 1.62% and all other answers to 1 decimal place, e.g. 1.6 or 1.6%.)

(a) Current ratio.
(b) Inventory turnover. (Inventory on 12/31/18 was $344.)
(c) Profit margin ratio.
(d) Return on assets. (Assets on 12/31/18 were $1,918.)
(e) Return on common stockholders equity. (Stockholders' equity on 12/31/18 was $906.)
(f) Debt to assets ratio.
(g) Times interest earned.

2020

2019

(a) Current ratio :1 :1
(b) Inventory turnover times times
(c) Profit margin ratio % %
(d) Return on assets % %
(e) Return on common stockholders equity % %
(f) Debt to assets ratio % %
(g) Times interest earned times times

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions