UNDERWOOD COMPANY

Balance Sheets

December 31

2018 2017

Current assets

Cash and cash equivalent $330 $360

Accounts receivable (net) 470 400

Inventory 460 390

Prepaid expenses 120 160

Total current assets 1,380 1,310

Investments 10 10

Property, plant, and equipment 420 380

Intangibles and other assets 530 510

Total assets $2,340 $2,210

Current liabilities $900 $790

Long-term liabilities 410 380

Stockholders' equitycommon 1,030 1,040

Total liabilities and stockholders' equity $2,340 $2,210

UNDERWOOD COMPANY

Income Statements

For the Years Ended December 31

2018 2017

Sales revenue $3,800 $3,460

Costs and expenses

Cost of goods sold 955 890

Selling & administrative expenses 2,400 2,330

Interest expense 25 20

Total costs and expenses 3,380 3,240

Income before income taxes 420 220

Income tax expense 126 66

Net income $294 $154

Compute the following ratios for 2018 and 2017.

a)Current ratio.

b)Inventory turnover. (Inventory on 12/31/16 was $340.)

c)Profit margin.

d)Return on assets. (Assets on 12/31/16 were $1,900.)

e)Return on common stockholders' equity. (Stockholders' equity on 12/31/16 was $900.)

f)Debt to assets ratio.

g)Times interest earned.