Comparative financial statement data of Hantield, Inc. follow Click the icon to view the income statement) E (Click the icon to view the balance sheet) Requirement 1a. Compute the current ratios for 2018 and 2017 Begin by selecting the formula to compute the current ratio. Current ratio Balance Hanfield, Inc. Comparative Balance Sheet December 31, 2018 and 2017 2018 2017 2016" Assets Current Assets Cash $ 93,000 S 112,000 Accounts Receivables, Net Merchandise Inventory Prepaid Expenses Total Current Assets 92,000 120,000 $ 105,000 158,000 208,000 9,000 145,000 18,000 Property, Plant, and Equipment, Net 368,000 379.000 219.000 179,000 $ 587.000 $ 558,000 Total Assets $600.000 Liabilities Total Current Liabilities $ 225,000 $ 117.000 245.000 97000 Long-term Liabilities Total Liabilities 342.000 342,000 104 000 141,000 104,000 112,000 90,000 Stockholders' Equity Preferred Stock, 6% Common Stockholders' Equity, no par Total Liabilities and Stockholders' Equity Selected 2016 amounts $ 587,000 $ 558,000 Print Done - Income Statement Hanfield, Inc. Comparative Income Statement Years Ended December 31, 2018 and 2017 2018 2017 Net Sales Revenue $ 460,000 $ 424,000 243,000 214,000 Cost of Goods Sold Gross Profit 217,000 138,000 210,000 136,000 Operating Expenses Income From Operations 79.000 74.000 11,000 9,000 Interest Expense Income Before Income Tax 70 000 19,000 63,000 25,000 Income Tax Expense Net Income $ 51,000 $ 38,000 Print Done Additional Financial Information 1. Market price of Hanfield's common stock $57 28 at December 31, 2018, and $37 10 at December 31, 2017 2. Common shares outstanding 13,000 on December 31, 2018 and 12,000 on December 31, 2017 and 2016. 3. All sales are on credit Print Done - - X Requirements 1. Compute the following ratios for 2018 and 2017 a. Current ratio b. Cash ratio c. Times-interest-earned ratio d. Inventory turnover e. Gross profit percentage f. Debt to equity ratio g. Rate of return on common stockholders' equity h. Earnings per share of common stock i. Price/earnings ratio 2. Decide (a) whether Hanfield's ability to pay debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased Print Done Begin by selecting the formula to compute the current ratio, Current ratio Average merchandise inventory - Net sales revenue (Cash Cash equivalents) - Total current liabilities (Cash Accounts recoivable net) - Total current liabilities Cost of goods sold - Average merchandise inventory Gross profit - Net sales revenue Market price per share of common stock Earnings per share (Net Income + Income tax expense. Interest expense) - Interest expense (Net income - Preferred dividends) Average common stockholder's equity (Net income - Preferred dividends) Weighted average number of common shares outstanding Total current assets Total current liabilities Total equity - Total liabilities Total liabilities - Total equity
