The following financial information is for Ivanhoe Company. IVANHOE COMPANY Balance Sheets December 31 Assets 2017 2016 Cash $ 71,000 $66,000 Debt investments (short-term) Accounts receivable 52,000 110,000 233.000 25,000 40,000 91,000 165,000 27,000 Inventory Prepaid expenses Land 130,000 130,000 Building and equipment (net) 259.000 184,000 Total assets $880,000 $703,000 Liabilities and Stockholders' Equity Notes payable $171,000 $110,000 Accounts payable 68,000 53,000 Accrued liabilities Bonds payable, due 2017 39,000 249,000 207,000 146,000 39,000 169,000 207,000 125,000 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $880,000 $703.000 IVANHOE COMPANY Income Statements For the Years Ended December 31 2017 2016 Sales revenue $895,000 $793,000 Cost of goods sold 640,000 255,000 Gross profit 574,000 219,000 161,000 $58,000 Operating expenses 190,000 Net income $ 65,000 Additional information: 1. Inventory at the beginning of 2016 was $115,000. 2. Accounts receivable (net) at the beginning of 2016 were $88,000. 3. Total assets at the beginning of 2016 were $630,000. 4. No common stock transactions occurred during 2016 or 2017. 5. All sales were on account. - Your answer is partially correct. Compute the liquidity and profitability ratios of Ivanhoe Company for 2016 and 2017. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g.-1.83% or (1.83%).) 2016 2017 % Change LIQUIDITY Current ratio 1931 -8.30 % Accounts receivables turnover 8.20 times .77 :1 8.91 times 3.22 times C 8.66 Inventory turnover 4.10 times times 2 -21.95 195 % 2016 2017 % Change PROFITABILITY Profit margin -8.02% 7.89 % 1.20 times Asset turnover 7.26 % 1.13 times 8.21 % -5.83 Return on assets 9.45 % -13.12 Earnings per share $ 3.04 3.14 3.29 e Textbook and Media - Your answer is partially correct. Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2017, and (2) as of December 31, 2018, after giving effect to the situation. Net income for 2018 was $52,000. Total assets on December 31, 2018, were $881,000. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, eg.-1.83% or (1.83%).) Situation Ratio 1. 20,000 shares of common stock were sold at par on July 1, 2018 Return on common stockholders' equity 2. All of the notes payable were paid in 2018. Debt to assets ratio 3. The market price of common stock was $9 and $13 on December 31, 2017 and 2018, respectively. Price-earnings ratio 2017 2018 % Change Return on common stockholders' equity 2.60 % 17.20 3.14 59.89 Debt to assets ratio % 40.41 % 32,53 % Price earnings ratio times times
