Compute the following ratios for 2021 and 2022. (Round profit margin, gross profit rate and price-earnings ratio to 1 decimal place, e.g. 1.8 or 1.8%. Round asset turnover and earnings per share to 2 decimal places, e.g. 1.25. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 25%.) 2022 2021 Profit margin enter profit margin in percentage rounded to 1 decimal place % enter profit margin in percentage rounded to 1 decimal place % Gross profit rate enter gross profit rate in percentage rounded to 1 decimal place % enter gross profit rate in percentage rounded to 1 decimal place % Asset turnover enter a number for asset turnover in times rounded to 2 decimal places times enter a number for asset turnover in times rounded to 2 decimal places times Earnings per share $enter earnings per share in dollars rounded to 2 decimal places $enter earnings per share in dollars rounded to 2 decimal places Price-earnings ratio enter a number for price earnings ratio in times rounded to 1 decimal place times enter a number for price earnings ratio in times rounded to 1 decimal place times Payout ratio enter payout ratio in percentage rounded to 1 decimal place % enter payout ratio in percentage rounded to 1 decimal place % Debt to assets ratio enter debt to assets ratio in percentage rounded to 0 decimal places % enter debt to assets ratio in percentage rounded to 0 decimal places %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Condensed balance sheet and income statement data for Bridgeport Corporation are presented here.

BRIDGEPORT CORPORATION Balance Sheets December 31
	2022	2021	2020
Cash	$ 32,000	$ 22,000	$ 20,000
Accounts receivable (net)	52,000	47,000	50,000
Other current assets	93,000	98,000	67,000
Investments	58,000	73,000	48,000
Property, plant, and equipment (net)	500,000	370,000	358,000
	$735,000	$610,000	$543,000
Current liabilities	$ 87,000	$ 82,000	$ 72,000
Long-term debt	148,000	88,000	53,000
Common stock, $10 par	323,000	313,000	303,000
Retained earnings	177,000	127,000	115,000
	$735,000	$610,000	$543,000

BRIDGEPORT CORPORATION Income Statements For the Years Ended December 31
	2022	2021
Sales	$743,000	$603,000
Less: Sales returns and allowances	42,000	32,000
Net sales	701,000	571,000
Cost of goods sold	428,000	353,000
Gross profit	273,000	218,000
Operating expenses (including income taxes)	182,000	152,000
Net income	$ 91,000	$ 66,000

Additional information:

1.		The market price of Bridgeport’s common stock was $7.00, $7.50, and $8.50 for 2020, 2021, and 2022, respectively.
2.		You must compute dividends declared. All declared dividends were paid in cash in the year of declaration.

(a)

Compute the following ratios for 2021 and 2022. (Round profit margin, gross profit rate and price-earnings ratio to 1 decimal place, e.g. 1.8 or 1.8%. Round asset turnover and earnings per share to 2 decimal places, e.g. 1.25. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 25%.)

	2022		2021
Profit margin	enter profit margin in percentage rounded to 1 decimal place	%		enter profit margin in percentage rounded to 1 decimal place	%
Gross profit rate	enter gross profit rate in percentage rounded to 1 decimal place	%		enter gross profit rate in percentage rounded to 1 decimal place	%
Asset turnover	enter a number for asset turnover in times rounded to 2 decimal places	times		enter a number for asset turnover in times rounded to 2 decimal places	times
Earnings per share	$enter earnings per share in dollars rounded to 2 decimal places			$enter earnings per share in dollars rounded to 2 decimal places
Price-earnings ratio	enter a number for price earnings ratio in times rounded to 1 decimal place	times		enter a number for price earnings ratio in times rounded to 1 decimal place	times
Payout ratio	enter payout ratio in percentage rounded to 1 decimal place	%		enter payout ratio in percentage rounded to 1 decimal place	%
Debt to assets ratio	enter debt to assets ratio in percentage rounded to 0 decimal places	%		enter debt to assets ratio in percentage rounded to 0 decimal places	%

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