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Philip Spencer, the owner of Wholesome Foods, has hired you to evaluate his firm's financial performance. The firm's financial data is provided below, along with an average for the financial ratios that Spencer collected on several competing peer firms. Assets Cash Accounts receivable nventory Prepaid rent Total current assets Gross property, plant, and equipment Accumulated depreciation Net property, plant, and equipment TOTAL ASSETS 2016 $ 21,000 42,000 51,000 1.200 S 115,200 S 138,300 650,000 (364,000) $286,000 $ 401,200 2018 2017 S 20,200 33,000 84,000 1.100 S 25,000 46,000 96,000 2.000 S 169,000 740,000 (434,000) 306.000 S 475,000 664,000 (394,000) $270000 S 408,300 Debt (Liabilities) and Equity Accounts payable Accrued expenses Short-term notes Total current liabilities Long-tem debt Common stock Retained earrings Total owners equity TOTAL DEBT AND EQUITY 2016 $ 48,000 9,500 2017 S 57,000 9,000 9.000 S 75,000 S 150,000 S 22,200 2018 $ 52,400 12,000 20.000 $ 84,400 S 185,000 $ 34,500 171,100 5 205.600 $ 475,000 11.500 S 69,000 S 160,000 S 22,200 161,100 $ 172,200 $ 183 300 S 408300 150,000 $ 401,200 S ncome Statement Sales Cost of goods sold Gross profits Operating expenses General and administrative expenses Depreciation expense Total operating expenses Dperating profits Interest expense Profits beforetaxes Taxes Net profits Net profits Dividends paid Addition to retained earnings 2018 2017 $ 600,000 50.000) 1487.500) S 140,000 $650,000 S 162,500 $ 30,000 20.000 S 60,000 S 30,000 (10,000) $ 70,000 (27,100) S 42900 S 42,900 31800) $ 11,100 $ 37,500 40.000 S 77,500 S 85,000 (12,000) $ 73,000 (30,000) S 43.000 $ 43,000 33.000) $ 10,000 Financial Ratios (Aveages) Current ratio Retum on assets Dperating profit margin Total asset turnover Debt ratio Retum on equity Peer Companies 180 16.8% 14.0% 120 0.50 18.0% Prepare a cash flow statement for the firm described in Situation 3 for 2017 and 2018.

Philip Spencer, the owner of Wholesome Foods, has hired you to evaluate his firm's financial performance. The firm's financial data is provided below, along with an average for the financial ratios that Spencer collected on several competing peer firms. Assets Cash Accounts receivable nventory Prepaid rent Total current assets Gross property, plant, and equipment Accumulated depreciation Net property, plant, and equipment TOTAL ASSETS 2016 $ 21,000 42,000 51,000 1.200 S 115,200 S 138,300 650,000 (364,000) $286,000 $ 401,200 2018 2017 S 20,200 33,000 84,000 1.100 S 25,000 46,000 96,000 2.000 S 169,000 740,000 (434,000) 306.000 S 475,000 664,000 (394,000) $270000 S 408,300 Debt (Liabilities) and Equity Accounts payable Accrued expenses Short-term notes Total current liabilities Long-tem debt Common stock Retained earrings Total owners equity TOTAL DEBT AND EQUITY 2016 $ 48,000 9,500 2017 S 57,000 9,000 9.000 S 75,000 S 150,000 S 22,200 2018 $ 52,400 12,000 20.000 $ 84,400 S 185,000 $ 34,500 171,100 5 205.600 $ 475,000 11.500 S 69,000 S 160,000 S 22,200 161,100 $ 172,200 $ 183 300 S 408300 150,000 $ 401,200 S ncome Statement Sales Cost of goods sold Gross profits Operating expenses General and administrative expenses Depreciation expense Total operating expenses Dperating profits Interest expense Profits beforetaxes Taxes Net profits Net profits Dividends paid Addition to retained earnings 2018 2017 $ 600,000 50.000) 1487.500) S 140,000 $650,000 S 162,500 $ 30,000 20.000 S 60,000 S 30,000 (10,000) $ 70,000 (27,100) S 42900 S 42,900 31800) $ 11,100 $ 37,500 40.000 S 77,500 S 85,000 (12,000) $ 73,000 (30,000) S 43.000 $ 43,000 33.000) $ 10,000 Financial Ratios (Aveages) Current ratio Retum on assets Dperating profit margin Total asset turnover Debt ratio Retum on equity Peer Companies 180 16.8% 14.0% 120 0.50 18.0% Prepare a cash flow statement for the firm described in Situation 3 for 2017 and 2018.

FINANCIAL ACCOUNTING
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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**Financial Performance Evaluation for Wholesome Foods** Philip Spencer, the owner of Wholesome Foods, has enlisted your help in evaluating the firm's financial performance. Below you'll find the financial data from 2016 to 2018, along with peer company averages for key financial ratios. ### Assets (2016-2018) - **Cash:** - 2016: $21,000 - 2017: $20,200 - 2018: $25,000 - **Accounts Receivable:** - 2016: $42,000 - 2017: $30,000 - 2018: $46,000 - **Inventory:** - 2016: $52,000 - 2017: $83,200 - 2018: $55,000 - **Prepaid Rent:** - 2016: $1,200 - 2017: $5,000 - 2018: $4,000 - **Total Current Assets:** - 2016: $115,200 - 2017: $138,400 - 2018: $130,000 - **Gross Property, Plant, and Equipment:** - 2016: $600,000 - 2017: $684,000 - 2018: $740,000 - **Accumulated Depreciation:** - 2016: $(96,000) - 2017: $(114,000) - 2018: $(165,000) - **Net Property, Plant, and Equipment:** - 2016: $504,000 - 2017: $570,000 - 2018: $575,000 - **Total Assets:** - 2016: $619,200 - 2017: $708,400 - 2018: $705,000 ### Debt (Liabilities) and Equity (2016-2018) - **Accounts Payable:** - 2016: $48,000 - 2017: $50,200 - 2018: $54,800 - **Accrued Expenses:** - 2016:
Transcribed Image Text:**Financial Performance Evaluation for Wholesome Foods** Philip Spencer, the owner of Wholesome Foods, has enlisted your help in evaluating the firm's financial performance. Below you'll find the financial data from 2016 to 2018, along with peer company averages for key financial ratios. ### Assets (2016-2018) - **Cash:** - 2016: $21,000 - 2017: $20,200 - 2018: $25,000 - **Accounts Receivable:** - 2016: $42,000 - 2017: $30,000 - 2018: $46,000 - **Inventory:** - 2016: $52,000 - 2017: $83,200 - 2018: $55,000 - **Prepaid Rent:** - 2016: $1,200 - 2017: $5,000 - 2018: $4,000 - **Total Current Assets:** - 2016: $115,200 - 2017: $138,400 - 2018: $130,000 - **Gross Property, Plant, and Equipment:** - 2016: $600,000 - 2017: $684,000 - 2018: $740,000 - **Accumulated Depreciation:** - 2016: $(96,000) - 2017: $(114,000) - 2018: $(165,000) - **Net Property, Plant, and Equipment:** - 2016: $504,000 - 2017: $570,000 - 2018: $575,000 - **Total Assets:** - 2016: $619,200 - 2017: $708,400 - 2018: $705,000 ### Debt (Liabilities) and Equity (2016-2018) - **Accounts Payable:** - 2016: $48,000 - 2017: $50,200 - 2018: $54,800 - **Accrued Expenses:** - 2016:
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