Current ratio. Inventory turnover. (Inventory on 12/31/16 was $340.) Profit margin. Return on assets. (Assets on 12/31/16 were $1,900.) Return on common stockholders’ equity. (Stockholders’ equity on 12/31/16 was $900.) Debt to assets ratio. Times interest earned.
The condensed financial statements of Underwood Company for the years 2017 and 2018 are presented as follows. (Amounts in thousands.)
UNDERWOOD COMPANY |
||
2018 |
2017 |
|
Current assets |
||
Cash and cash equivalents |
$330 |
$360 |
|
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 |
|
1,030 |
1,040 |
Total liabilities and stockholders’ equity |
$2,340 |
$2,210 |
|
UNDERWOOD COMPANY |
||
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.
Current ratio .- Inventory turnover. (Inventory on 12/31/16 was $340.)
- Profit margin.
- Return on assets. (Assets on 12/31/16 were $1,900.)
- Return on common stockholders’ equity. (Stockholders’ equity on 12/31/16 was $900.)
- Debt to assets ratio.
- Times interest earned.
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