The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times
The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below. BLOSSOM COMPANY Balance Sheets December 31 (in thousands) 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 630 560 Inventory 580 510 Prepaid expenses 130 160 Total current assets 1,670 1590 Property, plant, and equipment (net) 410 380 Investments 170 170 530 510 Intangibles and other assets $2,780 $2,650 Total assets $980 $950 Current liabilities Long-term liabilities 600 500 Stockholders' equity-common 1,200 1,200 Total liabilities and stockholders equity $2780 $2,650 BLOSSOM COMPANY Income Statements For the Year Ended December 31 (in thousands) 2019 2020 $3,920 $3,580 Sales revenue Costs and expenses Cost of goods sold 1,130 1050 Selling & administrative expenses 2400 2,330 Interest expense 10 20 Total costs and expenses 3,540 3400 Income before income taxes 380 180 Income tax expense 152 72 $228 $108 Net income Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.) (a) Current ratio. Inventory turnover. (Inventory on December 31, 2018, was $440.) (b) (c) Profit margin Return on assets. (Assets on December 31, 2018, were $2,180.) (d) Return on common stockholders' equity. (Equity on December 31, 2018, was $930.) (e) (f) Debt to assets ratio. Times interest earned (g) 2020 2019 (a) Current ratio 1 1 1.71 1.68 (b) Inventory turnover. (c) Profit margin. (d) Return on assets. (e) Return on common stockholders' equity (f) Debt to assets ratio. (g) Times interest earned times times
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The condensed financial statements of Blossom Company for the years 2019 and 2020 are presented below.
BLOSSOM COMPANY
Balance Sheets
December 31 (in thousands)
2020
2019
Current assets
Cash and cash equivalents
$330
$360
Accounts receivable (net)
630
560
Inventory
580
510
Prepaid expenses
130
160
Total current assets
1,670
1590
Property, plant, and equipment (net)
410
380
Investments
170
170
530
510
Intangibles and other assets
$2,780 $2,650
Total assets
$980
$950
Current liabilities
Long-term liabilities
600
500
Stockholders' equity-common
1,200
1,200
Total liabilities and stockholders equity
$2780 $2,650
BLOSSOM COMPANY
Income Statements
For the Year Ended December 31 (in thousands)
2019
2020
$3,920 $3,580
Sales revenue
Costs and expenses
Cost of goods sold
1,130
1050
Selling & administrative expenses
2400
2,330
Interest expense
10
20
Total costs and expenses
3,540
3400
Income before income taxes
380
180
Income tax expense
152
72
$228
$108
Net income
Transcribed Image Text:Compute the following ratios for 2020 and 2019. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal
place, e.g. 1.8 or 12.6%.)
(a) Current ratio.
Inventory turnover. (Inventory on December 31, 2018, was $440.)
(b)
(c) Profit margin
Return on assets. (Assets on December 31, 2018, were $2,180.)
(d)
Return on common stockholders' equity. (Equity on December 31, 2018, was $930.)
(e)
(f)
Debt to assets ratio.
Times interest earned
(g)
2020
2019
(a) Current ratio
1
1
1.71
1.68
(b) Inventory turnover.
(c) Profit margin.
(d) Return on assets.
(e) Return on common stockholders' equity
(f) Debt to assets ratio.
(g) Times interest earned
times
times
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