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The following financial statements apply to Karl Company: 2019 2018 Revenues Net sales $ 420,000 $ 350,000 Other revenues 16,000 10,000 Total revenues 436,000 360,000
The following financial statements apply to Karl Company:
2019 | 2018 | ||||||
Revenues | |||||||
Net sales | $ | 420,000 | $ | 350,000 | |||
Other revenues | 16,000 | 10,000 | |||||
Total revenues | 436,000 | 360,000 | |||||
Expenses | |||||||
Cost of goods sold | 252,000 | 206,000 | |||||
Selling expenses | 42,000 | 38,000 | |||||
General and administrative expenses | 22,000 | 20,000 | |||||
Interest expense | 6,000 | 6,000 | |||||
Income tax expense | 42,000 | 36,000 | |||||
Total expenses | 364,000 | 306,000 | |||||
Net income | $ | 72,000 | $ | 54,000 | |||
Assets | |||||||
Current assets | |||||||
Cash | $ | 8,000 | $ | 16,000 | |||
Marketable securities | 2,000 | 2,000 | |||||
Accounts receivable | 70,000 | 64,000 | |||||
Inventories | 200,000 | 192,000 | |||||
Prepaid expenses | 6,000 | 4,000 | |||||
Total current assets | 286,000 | 278,000 | |||||
Plant and equipment (net) | 210,000 | 210,000 | |||||
Intangibles | 40,000 | 0 | |||||
Total assets | $ | 536,000 | $ | 488,000 | |||
Liabilities and Stockholders Equity | |||||||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable | $ | 80,000 | $ | 108,000 | |||
Other | 34,000 | 30,000 | |||||
Total current liabilities | 114,000 | 138,000 | |||||
Bonds payable | 132,000 | 134,000 | |||||
Total liabilities | 246,000 | 272,000 | |||||
Stockholders equity | |||||||
Common stock (100,000 shares) | 230,000 | 230,000 | |||||
Retained earnings | 60,000 | (14,000 | ) | ||||
Total stockholders equity | 290,000 | 216,000 | |||||
Total liabilities and stockholders equity | $ | 536,000 | $ | 488,000 | |||
Required
Calculate the following ratios for 2018 and 2019. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.
- Net margin. (Round your answers to 2 decimal places.)
- Return on investment. (Round your answers to 2 decimal places.)
- Return on equity. (Round your answers to 2 decimal places.)
- Earnings per share. (Round your answers to 2 decimal places.)
- Price-earnings ratio (market prices at the end of 2018 and 2019 were $11.88 and $9.54, respectively). (Round your intermediate calculations and final answers to 2 decimal places.)
- Book value per share of common stock. (Round your answers to 2 decimal places.)
- Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and, therefore, will not be available to satisfy future interest payments. (Round your answers to 2 decimal places.)
- Working capital.
- Current ratio. (Round your answers to 2 decimal places.)
- Quick (acid-test) ratio. (Round your answers to 2 decimal places.)
- Accounts receivable turnover. (Round your answers to 2 decimal places.)
- Inventory turnover. (Round your answers to 2 decimal places.)
- Debt to equity ratio. (Round your answers to 2 decimal places.)
- Debt to assets ratio. (Round your answers to the nearest whole percent.)
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