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