Presented below is selected information for Brimmer Company: 2013 2012 Sales revenue $911,000 $840,000 Cost of goods sold 576,000 542,000 Interest expense 21,000 20,000 Income tax expense 28,000 24,000 Net income 62,000 52,000 Cash flow from operating activities 66,000 55,000 Capital expenditures 43,000 45,000 Accounts receivable (net), December 31 127,000 120,000 Inventory, December 31 197,000 160,000 Stockholders' equity, December 31 451,000 400,000 Total assets, December 31 731,000 660,000
Presented below is selected information for Brimmer Company: 2013 2012 Sales revenue $911,000 $840,000 Cost of goods sold 576,000 542,000 Interest expense 21,000 20,000 Income tax expense 28,000 24,000 Net income 62,000 52,000 Cash flow from operating activities 66,000 55,000 Capital expenditures 43,000 45,000 Accounts receivable (net), December 31 127,000 120,000 Inventory, December 31 197,000 160,000 Stockholders' equity, December 31 451,000 400,000 Total assets, December 31 731,000 660,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Changes in Various Ratios
Presented below is selected information for Brimmer Company:
| 2013 | 2012 | |
|---|---|---|
| Sales revenue | $911,000 | $840,000 |
| Cost of goods sold | 576,000 | 542,000 |
| Interest expense | 21,000 | 20,000 |
| Income tax expense | 28,000 | 24,000 |
| Net income | 62,000 | 52,000 |
| 66,000 | 55,000 | |
| Capital expenditures | 43,000 | 45,000 |
| 127,000 | 120,000 | |
| Inventory, December 31 | 197,000 | 160,000 |
| 451,000 | 400,000 | |
| Total assets, December 31 | 731,000 | 660,000 |
Required
Calculate the following ratios for 2013. The 2012 results are given for comparative purposes.
Round answers to one decimal place. Use 365 days in a year.
| 2012 | 2013 | |||
|---|---|---|---|---|
| 1. Gross profit percentage | 35.5% | Answer | % | |
| 2. Return on assets | 8.3% | Answer | % | |
| 3. Return on sales | 6.2% | Answer | % | |
| 4. Return on common stockholders' equity | ||||
| (no |
13.9% | Answer | % | |
| 5. Accounts receivable turnover | 8.0 | Answer | ||
| 6. Average collection period | 45.6 | days | Answer | days |
| 7. Inventory turnover | 3.6 | Answer | ||
| 8. Times-interest-earned ratio | 4.8 | Answer | ||
| 9. Operating-cash-flow-to-capital-expenditures ratio | 1.2 | Answer |
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