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The condensed financial statements of Underwood Company for the years 2017 and 2018 are presented as follows. (Amounts in thousands.) UNDERWOOD COMPANY Balance Sheets December

The condensed financial statements of Underwood Company for the years 2017 and 2018 are presented as follows. (Amounts in thousands.)

UNDERWOOD COMPANY Balance Sheets December 31

2018

2017

Current assets

Cash and cash equivalents

$330

$360

Accounts receivable (net)

470

400

Inventory

460

390

Prepaid expenses

120

160

Total current assets

1,380

1,310

Investments

10

10

Property, plant, and equipment

420

380

Intangibles and other assets

530

510

Total assets

$2,340

$2,210

Current liabilities

$900

$790

Long-term liabilities

410

380

Stockholders equitycommon

1,030

1,040

Total liabilities and stockholders equity

$2,340

$2,210

UNDERWOOD COMPANY Income Statements For the Years Ended December 31

2018

2017

Sales revenue

$3,800

$3,460

Costs and expenses

Cost of goods sold

955

890

Selling & administrative expenses

2,400

2,330

Interest expense

25

20

Total costs and expenses

3,380

3,240

Income before income taxes

420

220

Income tax expense

126

66

Net income

$294

$154

Compute the following ratios for 2018 and 2017.

  1. Current ratio.
  2. Inventory turnover. (Inventory on 12/31/16 was $340.)
  3. Profit margin.
  4. Return on assets. (Assets on 12/31/16 were $1,900.)
  5. Return on common stockholders equity. (Stockholders equity on 12/31/16 was $900.)
  6. Debt to assets ratio.
  7. Times interest earned.

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