E5.4 (LO 3) The 2020 and 2019 financial statements of Ken’s Sportswear follow: Balance Sheet 2020 2019 Assets
E5.4 (LO 3) The 2020 and 2019 financial statements of Ken’s Sportswear follow: Balance Sheet 2020 2019 Assets
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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E5.4 (LO 3) The 2020 and 2019 financial statements of Ken’s Sportswear follow:
2020 | 2019 | |
Assets | ||
Cash | $9,000 | $7,000 |
12,000 | 9,000 | |
Inventory | 18,000 | 15,000 |
Property, plant, and equipment | 60,000 | 50,000 |
Total assets | $99,000 | $81,000 |
Liabilities and Shareholders’ Equity | ||
Accounts payable | $16,500 | $12,000 |
Notes payable | 46,000 | 40,000 |
Common stock | 25,000 | 25,000 |
11,500 | 4,000 | |
Total liabilities and equity | $99,000 | $81,000 |
2020 | 2019 | |
Income Statement | ||
Sales (all on credit) | $72,000 | |
Less: Cost of goods sold | 30,000 | |
Gross profit | $42,000 | |
Operating expenses | 12,000 | |
Net income from operations | $30,000 | |
Interest expense | 5,000 | |
Net income before taxes | $25,000 | |
Income tax expense | 8,500 | |
Net income | $16,500 | |
Dividends | $9,000 | |
Per-share market price | $36 | $30 |
Outstanding common shares | 2,000 | 2,000 |
- Compute the two performance ratios, leverage (debt/equity and interest coverage only), solvency (current and quick only), asset quality (receivable and inventory turnover only), expense control (return on sales only), performance, and other ratios from Figure 5–3 for 2020.
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