Cherry Company Comparative Income Statements (000's omitted) For the Years Ended December 31, 20x5 and 20x4   20x5 20x4 Net Sales  $       360  $       290 Cost of Goods Sold           255           172 Gross Profit           105           118 Operating Expenses             84             65 Operating Income             21             53 Interest Expense             10             12 Income Before Income Taxes             11             41 Income Taxes               4             16 Net Income  $           7  $         25       Cherry Company Comparative Balance Sheets (000's omitted) December 31, 20x5 and 20x4 Assets: 12/31/20x5 12/31/20x4 Current Assets  $         48  $       110 Property, Plant, and Equipment (net)           285           245 Total Assets  $       333  $       355       Liabilities and Stockholders' Equity:     Current Liabilities             36             54 Long-Term Liabilities           175           123 Total Liabilities           211           177 Stockholders' Equity           122           178 Total Liabilities and Stockholders' Equity  $       333  $       355       Common Stock: 20x5 20x4 Market Price Per Share at 12/31  $   19.80  $   28.40 Cash Dividends Per Share  $      2.80  $      2.20             Problem 5  - Answers here: use 2 decimal places     Ratios Summary 20x5 20x4 Current ratio          1.33          2.04 Debt to Equity Ratio          0.63          0.50 Net Profit Margin Ratio 1.94% 8.62% Gross Profit Ratio 29.17% 40.70% Return on Equity 5.70% 14.04% Dividend Yield Ratio 14.14% 7.75% 1- Could you provide some comments on the Cherry Co overall performance?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Problem 5  - Ratio Analysis    
     
     
Cherry Company
Comparative Income Statements (000's omitted)
For the Years Ended December 31, 20x5 and 20x4
  20x5 20x4
Net Sales  $       360  $       290
Cost of Goods Sold           255           172
Gross Profit           105           118
Operating Expenses             84             65
Operating Income             21             53
Interest Expense             10             12
Income Before Income Taxes             11             41
Income Taxes               4             16
Net Income  $           7  $         25
     
Cherry Company
Comparative Balance Sheets (000's omitted)
December 31, 20x5 and 20x4
Assets: 12/31/20x5 12/31/20x4
Current Assets  $         48  $       110
Property, Plant, and Equipment (net)           285           245
Total Assets  $       333  $       355
     
Liabilities and Stockholders' Equity:    
Current Liabilities             36             54
Long-Term Liabilities           175           123
Total Liabilities           211           177
Stockholders' Equity           122           178
Total Liabilities and Stockholders' Equity  $       333  $       355
     
Common Stock: 20x5 20x4
Market Price Per Share at 12/31  $   19.80  $   28.40
Cash Dividends Per Share  $      2.80  $      2.20
     
     
Problem 5  - Answers here: use 2 decimal places    
Ratios Summary 20x5 20x4
Current ratio          1.33          2.04
Debt to Equity Ratio          0.63          0.50
Net Profit Margin Ratio 1.94% 8.62%
Gross Profit Ratio 29.17% 40.70%
Return on Equity 5.70% 14.04%
Dividend Yield Ratio 14.14% 7.75%
1- Could you provide some comments on the Cherry Co overall performance?
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