Question
The condensed financial statements of Waterway Company for the years 2021 and 2022 are presented as follows. (Amounts in thousands.) WATERWAY COMPANY Balance Sheets December
The condensed financial statements of Waterway Company for the years 2021 and 2022 are presented as follows. (Amounts in thousands.)
WATERWAY COMPANY Balance Sheets December 31 | ||||||
---|---|---|---|---|---|---|
2022 | 2021 | |||||
Current assets | ||||||
Cash and cash equivalents | $ 354 | $ 357 | ||||
Accounts receivable (net) | 402 | 468 | ||||
Inventory | 384 | 432 | ||||
Prepaid expenses | 172 | 106 | ||||
Total current assets | 1,312 | 1,363 | ||||
Investments | 13 | 15 | ||||
Property, plant, and equipment (net) | 390 | 426 | ||||
Intangibles and other assets | 480 | 504 | ||||
Total assets | $2,195 | $2,308 | ||||
Current liabilities | $ 808 | $ 890 | ||||
Long-term liabilities | 392 | 426 | ||||
Stockholders equitycommon | 995 | 992 | ||||
Total liabilities and stockholders equity | $2,195 | $2,308 |
WATERWAY COMPANY Income Statements For the Years Ended December 31 | ||||||
---|---|---|---|---|---|---|
2022 | 2021 | |||||
Net sales | $3,900 | $3,790 | ||||
Expenses | ||||||
Cost of goods sold | 890 | 944 | ||||
Selling and administrative expenses | 2,305 | 2,392 | ||||
Interest expense | 24 | 23 | ||||
Total expenses | 3,219 | 3,359 | ||||
Income before income taxes | 681 | 431 | ||||
Income tax expense | 150 | 86 | ||||
Net income | $ 531 | $ 345 |
Compute the following ratios for 2022 and 2021. (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 12/31/20 was $344.) | |
(c) | Profit margin. | |
(d) | Return on assets. (Assets on 12/31/20 were $1,876.) | |
(e) | Return on common stockholders equity. (Stockholders' equitycommon on 12/31/20 was $884.) | |
(f) | Debt to assets ratio. | |
(g) | Times interest earned. |
2022 | 2021 | |||||||
---|---|---|---|---|---|---|---|---|
(a) | Current ratio | enter ratio rounded to 2 decimal places | :1 | enter ratio rounded to 2 decimal places | :1 | |||
(b) | Inventory turnover | enter a number of times rounded to 2 decimal places | times | enter a number of times rounded to 2 decimal places | times | |||
(c) | Profit margin | enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
(d) | Return on assets | enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
(e) | Return on common stockholders equity | enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
(f) | Debt to assets ratio | enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
(g) | Times interest earned | enter a number of times rounded to 1 decimal place | times | enter a number of times rounded to 1 decimal place | times |
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