Question
Use the following financial statements of Precision Co. to complete these requirements . Compute the following ratios as of December 31, 20 23 and 2012
Use the following financial statements of Precision Co. to complete these requirements. Compute the following ratios as of December 31, 2023 and 2012, or for the year ended December 31, 2023 and 2022, and make financial statement analysis for Precision Company.
a. Liquilidity ratios b. Activity ratios c. Debt ratios d. Profitability ratios e. Market ratios
PRECISION COMPANY
Comparative Income Statements
For Years Ended December 31, 2023 and 2022
2023
2022
Sales
$ 2,486,000
$ 2,075,000
Cost of goods sold
1,523,000
1,222,000
Gross profit
963,000
853,000
Operating expenses
Advertising expenses
145,000
100,000
Sales salaries expense
240,000
280,000
Office salaries expense
165,000
200,000
Insurance expense
100,000
45,000
Supplies expense
26,000
35,000
Depreciation expense
85,000
75,000
Miscellaneous expenses
17,000
15,000
Total operating expenses
778,000
750,000
Operating income
185,000
103,000
Interest expense
44,000
46,000
Income before taxes
141,000
57,000
Income taxes
47,000
19,000
Net income
94,000
38,000
Earnings per share
0.99
0.40
PRECISION COMPANY
Comparative Balance Sheets
December 31, 2023 and 2022
Assets
2023
2022
Current assets
Cash
$ 79,000
$ 42,000
Short-term investment
65,000
96,000
Account receivable
120,000
100,000
Merchandise inventory
250,000
265,000
Total current assets
514,000
503,000
Fixed assets
Store equipment, net
400,000
350,000
Office equipment, net
45,000
50,000
Buildings, net
625,000
675,000
Land
100,000
100,000
Total fixed assets
1,170,000
1,175,000
Total assets
1,684,000
1,678,000
Liabilities
Current liabilities
Account payable
164,000
190,000
Short-term notes payable
75,000
90,000
Taxes payable
26,000
12,000
Total current liabilities
265,000
292,000
Long-term liabilities
Notes payable (secured by mortgage on buildings)
400,000
420,000
Total liabilities
665,000
712,000
Stockholders Equity
Common stock, $5 par value
475,000
475,000
Retained earnings
544,000
491,000
Total stockholders equity
1,019,000
966,000
Total liabilities and equity
1,684,000
1,678,000
Use the following financial statements of Precision Co. to complete these requirements. Compute the following ratios as of December 31, 2023 and 2012, or for the year ended December 31, 2023 and 2022, and make financial statement analysis for Precision Company.
PRECISION COMPANY
Comparative Income Statements
For Years Ended December 31, 2023 and 2022
| 2023 | 2022 |
Sales | $ 2,486,000 | $ 2,075,000 |
Cost of goods sold | 1,523,000 | 1,222,000 |
Gross profit | 963,000 | 853,000 |
Operating expenses |
|
|
Advertising expenses | 145,000 | 100,000 |
Sales salaries expense | 240,000 | 280,000 |
Office salaries expense | 165,000 | 200,000 |
Insurance expense | 100,000 | 45,000 |
Supplies expense | 26,000 | 35,000 |
Depreciation expense | 85,000 | 75,000 |
Miscellaneous expenses | 17,000 | 15,000 |
Total operating expenses | 778,000 | 750,000 |
Operating income | 185,000 | 103,000 |
Interest expense | 44,000 | 46,000 |
Income before taxes | 141,000 | 57,000 |
Income taxes | 47,000 | 19,000 |
Net income | 94,000 | 38,000 |
|
|
|
Earnings per share | 0.99 | 0.40 |
PRECISION COMPANY
Comparative Balance Sheets
December 31, 2023 and 2022
Assets | 2023 | 2022 |
Current assets |
|
|
Cash | $ 79,000 | $ 42,000 |
Short-term investment | 65,000 | 96,000 |
Account receivable | 120,000 | 100,000 |
Merchandise inventory | 250,000 | 265,000 |
Total current assets | 514,000 | 503,000 |
Fixed assets |
|
|
Store equipment, net | 400,000 | 350,000 |
Office equipment, net | 45,000 | 50,000 |
Buildings, net | 625,000 | 675,000 |
Land | 100,000 | 100,000 |
Total fixed assets | 1,170,000 | 1,175,000 |
Total assets | 1,684,000 | 1,678,000 |
Liabilities |
|
|
Current liabilities |
|
|
Account payable | 164,000 | 190,000 |
Short-term notes payable | 75,000 | 90,000 |
Taxes payable | 26,000 | 12,000 |
Total current liabilities | 265,000 | 292,000 |
Long-term liabilities |
|
|
Notes payable (secured by mortgage on buildings) | 400,000 | 420,000 |
Total liabilities | 665,000 | 712,000 |
Stockholders Equity |
|
|
Common stock, $5 par value | 475,000 | 475,000 |
Retained earnings | 544,000 | 491,000 |
Total stockholders equity | 1,019,000 | 966,000 |
Total liabilities and equity | 1,684,000 | 1,678,000 |
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Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
26th edition
128574361X, 978-1305446052, 1305446054, 978-1285743615
