TABLE 4-7| Moderately Large Corporation Consolidated Statement of Earnings Consolidated Statement of Earnings (in thousands, except earning per share) Fiscal Year Ended: Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011 Net revenues Cash Sales Credit Sales Total Net Revenues $2,888 6,046 8,935 $2,751 5,258 8,009 $2,456 4,572 7,028 Cost of Sales Gross Profit 5,361 3,574 4,405 3,604 3,725 3,303 Salaries Insurance Depreciation General and administrative expenses Subtotal operating expenses Operating income Interest expense 1,258 155 150 489 2,052 1,522 10 1,183 116 135 479 1,913 1,691 11 1,112 93 122 361 1,687 1,616 11 Earnings before income taxes Income taxes 1,512 529 1,680 588 1,605 562 $ 983 Net Earnings Per Common Share Net Earnings Basic Net Earnings Diluted $1,092 $1,043 $ 0.28 $ 0.25 $ 0.31 $ 0.27 $ 0.30 $ 0.26 Weighted average shares outstanding: Basic Diluted 3,500 4,000 3,500 4,000 3,500 4,000 TABLE 4–4 Moderately Large Corporation Consolidated Balance Sheet Moderately Large Corporation Consolidaed Balance Sheet (in thousands except share data) Fiscal Year Ended Dec. 31, 2013 Dec. 31, 2012 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net $1,369 1,008 1,489 157 44 4,066 3,137 $1,427 876 481 126 40 2,950 2,287 161 $5,398 Inventories Prepaid expenses and other current assets Deferred income taxes, net Total current assets Property, plant and equipment, net Other assets TOTAL ASSETSS 168 $7,371 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable Accrued compensation and related costs Accrued taxes Current portion of long-term debt Total current liabilities Long-term debt Total liabilities $429 104 132 89 754 2,630 3,384 $242 98 141 82 563 1,830 2,392 Shareholders' equity: Common stock ($0.1 par value)-authorized, 4,000,000 shares; issued and outstanding, 3,500,000. Paid-in capital in excess of par Retained earnings Total shareholders' equity 350 350 2,415 1,222 3,987 $7,371 2,415 241 3,006 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,398

TABLE 4-7| Moderately Large Corporation Consolidated Statement of Earnings Consolidated Statement of Earnings (in thousands, except earning per share) Fiscal Year Ended: Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011 Net revenues Cash Sales Credit Sales Total Net Revenues $2,888 6,046 8,935 $2,751 5,258 8,009 $2,456 4,572 7,028 Cost of Sales Gross Profit 5,361 3,574 4,405 3,604 3,725 3,303 Salaries Insurance Depreciation General and administrative expenses Subtotal operating expenses Operating income Interest expense 1,258 155 150 489 2,052 1,522 10 1,183 116 135 479 1,913 1,691 11 1,112 93 122 361 1,687 1,616 11 Earnings before income taxes Income taxes 1,512 529 1,680 588 1,605 562 $ 983 Net Earnings Per Common Share Net Earnings Basic Net Earnings Diluted $1,092 $1,043 $ 0.28 $ 0.25 $ 0.31 $ 0.27 $ 0.30 $ 0.26 Weighted average shares outstanding: Basic Diluted 3,500 4,000 3,500 4,000 3,500 4,000 TABLE 4–4 Moderately Large Corporation Consolidated Balance Sheet Moderately Large Corporation Consolidaed Balance Sheet (in thousands except share data) Fiscal Year Ended Dec. 31, 2013 Dec. 31, 2012 ASSETS Current assets: Cash and cash equivalents Accounts receivable, net $1,369 1,008 1,489 157 44 4,066 3,137 $1,427 876 481 126 40 2,950 2,287 161 $5,398 Inventories Prepaid expenses and other current assets Deferred income taxes, net Total current assets Property, plant and equipment, net Other assets TOTAL ASSETSS 168 $7,371 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable Accrued compensation and related costs Accrued taxes Current portion of long-term debt Total current liabilities Long-term debt Total liabilities $429 104 132 89 754 2,630 3,384 $242 98 141 82 563 1,830 2,392 Shareholders' equity: Common stock ($0.1 par value)-authorized, 4,000,000 shares; issued and outstanding, 3,500,000. Paid-in capital in excess of par Retained earnings Total shareholders' equity 350 350 2,415 1,222 3,987 $7,371 2,415 241 3,006 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,398

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 10SPB: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...

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Question

Using both the balance sheet (Table 4–4) and the income statement
(Table 4–7) for the MLC, answer the following:
a. Calculate the following ratios for 2013: inventory turnover, fixed asset turnover,
and total asset turnover.
b. In a written explanation, describe what each ratio means.
c. In a brief paragraph, describe how well you believe the MLC is managing
its assets.

TABLE 4-7| Moderately Large Corporation Consolidated Statement of Earnings
Consolidated Statement of Earnings
(in thousands, except earning per share)
Fiscal Year Ended:
Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011
Net revenues
Cash Sales
Credit Sales
Total Net Revenues
$2,888
6,046
8,935
$2,751
5,258
8,009
$2,456
4,572
7,028
Cost of Sales
Gross Profit
5,361
3,574
4,405
3,604
3,725
3,303
Salaries
Insurance
Depreciation
General and administrative expenses
Subtotal operating expenses
Operating income
Interest expense
1,258
155
150
489
2,052
1,522
10
1,183
116
135
479
1,913
1,691
11
1,112
93
122
361
1,687
1,616
11
Earnings before income taxes
Income taxes
1,512
529
1,680
588
1,605
562
$ 983
Net Earnings
Per Common Share
Net Earnings Basic
Net Earnings Diluted
$1,092
$1,043
$ 0.28
$ 0.25
$ 0.31
$ 0.27
$ 0.30
$ 0.26
Weighted average shares outstanding:
Basic
Diluted
3,500
4,000
3,500
4,000
3,500
4,000

TABLE 4–4 Moderately Large Corporation Consolidated Balance Sheet
Moderately Large Corporation Consolidaed Balance Sheet
(in thousands except share data)
Fiscal Year Ended
Dec. 31, 2013 Dec. 31, 2012
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable, net
$1,369
1,008
1,489
157
44
4,066
3,137
$1,427
876
481
126
40
2,950
2,287
161
$5,398
Inventories
Prepaid expenses and other current assets
Deferred income taxes, net
Total current assets
Property, plant and equipment, net
Other assets
TOTAL ASSETSS
168
$7,371
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
Accrued compensation and related costs
Accrued taxes
Current portion of long-term debt
Total current liabilities
Long-term debt
Total liabilities
$429
104
132
89
754
2,630
3,384
$242
98
141
82
563
1,830
2,392
Shareholders' equity:
Common stock ($0.1 par value)-authorized,
4,000,000 shares; issued and outstanding, 3,500,000.
Paid-in capital in excess of par
Retained earnings
Total shareholders' equity
350
350
2,415
1,222
3,987
$7,371
2,415
241
3,006
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$5,398

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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