Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The condensed financial statements of Pharoah Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) PHAROAH COMPANY Balance Sheets December

image text in transcribed

image text in transcribed

The condensed financial statements of Pharoah Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) PHAROAH COMPANY Balance Sheets December 31 2020 2019 $360 520 590 160 Current assets Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Total current assets Investments Property, plant, and equipment Intangibles and other assets Total assets Current liabilities Long-term liabilities Stockholders' equity-common Total liabilities and stockholders' equity $330 590 660 120 1.700 130 420 530 $2.780 1,630 130 380 $1,020 610 1,150 $2,780 510 $2,650 $910 580 1,160 $2,650 2019 $3,660 PHAROAH COMPANY Income Statements For the Years Ended December 31 2020 Sales revenue $4,000 Costs and expenses Cost of goods sold 1,075 Selling & administrative expenses 2,400 Interest expense 25 Total costs and expenses 3.500 Income before income taxes 500 Income tax expense 150 Net income $ 350 1,010 2,330 20 3,360 300 90 $ 210 Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g. 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. (b) Inventory turnover. (Inventory on 12/31/18, was $390.) (c) Profit margin (d) Return on assets. (Assets on 12/31/18, were $2,390.) (e) Return on common stockholders' equity. (Stockholders' equity on 12/31/18, was $950.) (f) Debt to assets ratio. Times interest earned

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Finance For Non-Specialists

Authors: Eddie McLaney, Peter Atrill

11th Edition

1292244011, 9781292244013

More Books

Students also viewed these Accounting questions

Question

Have these firms violated TILA?

Answered: 1 week ago