Based on the financial statements provided and assuming the market price of Draper’s stock is $200 per share and there are 100 shares of common stock outstanding, calculate the following ratios for the year ended December 31, 2019. Round all amounts to TWO places past the decimal point. Show your calculations in the boxes provided. Current Ratio Debt Ratio Debt to Equity Ratio Earnings per Share Price to Earnings Ratio Return on Total Assets Return on Common Stockholders’ Equity
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Draper Consulting Inc. |
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Income Statement |
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Year Ended December 31, 2019 |
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Sales Revenue |
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925,000 |
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Less: Cost of Goods Sold |
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490,000 |
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Gross Profit |
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435,000 |
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Expenses: |
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|
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Wages Expense |
207,000 |
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|
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62,000 |
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Insurance Expense |
17,000 |
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Interest Expense |
12,000 |
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Income Tax Expense |
57,000 |
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Total Expense |
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355,000 |
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Other Income and (Expenses): |
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|
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Gain on Sale of Equipment |
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16,000 |
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Net Income |
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96,000 |
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Draper Consulting Inc. |
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December 31, 2019 and 2018 |
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2019 |
2018 |
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Assets: |
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Current Assets: |
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|
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Cash |
25,000 |
33,000 |
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68,000 |
51,000 |
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Inventory |
177,000 |
126,000 |
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Prepaid Insurance |
8,000 |
11,000 |
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Total Current Assets |
278,000 |
221,000 |
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Plant Assets: |
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|
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Equipment |
887,000 |
763,000 |
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Less: |
(191,000) |
(175,000) |
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Total Assets |
974,000 |
809,000 |
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Liabilities: |
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Current Liabilities: |
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|
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Accounts Payable |
37,000 |
27,000 |
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Interest Payable |
7,000 |
0 |
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Income Tax Payable |
11,000 |
19,000 |
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Total Current Liabilities |
55,000 |
46,000 |
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Long-Term Liabilities: |
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|
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Bonds Payable |
145,000 |
80,000 |
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Total Liabilities |
200,000 |
126,000 |
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Stockholders' Equity: |
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Common Stock |
660,000 |
585,000 |
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|
166,000 |
98,000 |
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Less: |
(52,000) |
0 |
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Total Stockholders' Equity |
774,000 |
683,000 |
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Total Liabilities and Stockholders' Equity |
974,000 |
809,000 |
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Draper Consulting, Inc. |
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Statement of Cash Flows |
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Year Ended December 31, 2019 |
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Cash Flows from Operating Activities: |
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Net Income |
96,000 |
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Adjustments to reconcile net income to net cash: |
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Depreciation Expense |
62,000 |
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Gain on Sale of Equipment |
(16,000) |
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Increase in Accounts Receivable |
(17,000) |
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Increase in Inventory |
(51,000) |
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Decrease in Prepaid Insurance |
3,000 |
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Increase in Accounts Payable |
10,000 |
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Increase in Interest Payable |
7,000 |
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Decrease in Income Tax Payable |
(8,000) |
(10,000) |
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Net Cash Provided by Operating Activities: |
86,000 |
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Cash Flows from Investing Activities: |
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Sale of Equipment |
27,000 |
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Purchase of Equipment |
(181,000) |
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Net Cash Used by Investing Activities: |
(154,000) |
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Cash Flows from Financing Activities: |
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Issuance of Bonds Payable |
65,000 |
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Issuance of Common Stock |
75,000 |
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Payment of Dividend |
(28,000) |
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Purchase of Treasury Stock |
(52,000) |
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Net Cash Provided by Financing Activities: |
60,000 |
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Net increase in cash |
(8,000) |
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Cash Balance, December 31, 2018 |
33,000 |
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Cash Balance, December 31, 2019 |
25,000 |
Based on the financial statements provided and assuming the market price of Draper’s stock is $200 per share and there are 100 shares of common stock outstanding, calculate the following ratios for the year ended December 31, 2019. Round all amounts to TWO places past the decimal point. Show your calculations in the boxes provided.
Current Ratio - Debt Ratio
- Debt to Equity Ratio
- Earnings per Share
- Price to Earnings Ratio
- Return on Total Assets
- Return on Common
Stockholders’ Equity
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