E5.4 (LO 3) The 2020 and 2019 financial statements of Ken’s Sportswear follow: Balance Sheet 2020 2019 Assets

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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E5.4 (LO 3) The 2020 and 2019 financial statements of Ken’s Sportswear follow:

Balance Sheet 2020 2019
Assets    
Cash $9,000 $7,000
Accounts receivable 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
Retained earnings 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
  1. 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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