The following financial statements apply to Finch Company: Year 2 Year 1 Revenues $ 220,700 $180,800 Expenses Cost of goods sold 125,400 101,600 Selling expenses 20,500 18,500 General and administrative expenses 9,700 8,700 Interest expense 1,100 1,100 Income tax expense 20,700 17,200 Total expenses 177,400 147,100 Net income $ 43,300 $33,700 Assets Current assets Cash $5,900 $7,300 Marketable securities 2,800 2,800 Accounts receivable 36, 100 30,400 Inventories 101,100 94,500 Prepaid expenses 4,100 3,100 Total current assets 150,000 138,100 Plant and equipment (net) 105,200 Intangibles 20,400 0 Total assets $275,600 $243,300 Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable $ 40,000 $34,200 Other 15,600 16,600 Total current liabilities 55,600 50,800 Bonds payable 64,700 65,700 105,200 Total liabilities 120,300 116,500 Stockholders' equity Common stock (49,000 shares) 114,700 Retained earnings 40,600 12,100 Total stockholders' equity 155,300 126,800 114,700 Total liabilities and stockholders' equity $275,600 $ 243,300 Required Calculate the following ratios for Year 1 and Year 2. Since opening balance numbers are not presented do not use averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 balance sheet. Required data: Year 2 Return on investment Return on equity Accounts receivable turnover Inventory turnover
The following financial statements apply to Finch Company: Year 2 Year 1 Revenues $ 220,700 $180,800 Expenses Cost of goods sold 125,400 101,600 Selling expenses 20,500 18,500 General and administrative expenses 9,700 8,700 Interest expense 1,100 1,100 Income tax expense 20,700 17,200 Total expenses 177,400 147,100 Net income $ 43,300 $33,700 Assets Current assets Cash $5,900 $7,300 Marketable securities 2,800 2,800 Accounts receivable 36, 100 30,400 Inventories 101,100 94,500 Prepaid expenses 4,100 3,100 Total current assets 150,000 138,100 Plant and equipment (net) 105,200 Intangibles 20,400 0 Total assets $275,600 $243,300 Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable $ 40,000 $34,200 Other 15,600 16,600 Total current liabilities 55,600 50,800 Bonds payable 64,700 65,700 105,200 Total liabilities 120,300 116,500 Stockholders' equity Common stock (49,000 shares) 114,700 Retained earnings 40,600 12,100 Total stockholders' equity 155,300 126,800 114,700 Total liabilities and stockholders' equity $275,600 $ 243,300 Required Calculate the following ratios for Year 1 and Year 2. Since opening balance numbers are not presented do not use averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 balance sheet. Required data: Year 2 Return on investment Return on equity Accounts receivable turnover Inventory turnover
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:The following financial statements apply to Finch
Company:
Year 2 Year 1
Revenues $ 220,700 $180,800
Expenses
Cost of goods sold 125,400 101,600
Selling expenses 20,500
18,500
General and administrative expenses 9,700
8,700
Interest expense 1,100 1,100
Income tax expense 20,700 17,200
Total expenses 177,400
147,100
Net income $ 43,300 $33,700
Assets
Current assets
Cash $5,900 $7,300
Marketable securities 2,800 2,800
Accounts receivable 36, 100 30,400
Inventories 101,100
94,500
Prepaid expenses 4,100
3,100
Total current assets 150,000 138,100
Plant and equipment (net) 105,200
Intangibles 20,400 0
Total assets $275,600 $243,300
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable $ 40,000 $34,200
Other 15,600
16,600
Total current liabilities 55,600 50,800
Bonds payable 64,700
65,700
105,200
Total liabilities 120,300 116,500
Stockholders' equity
Common stock (49,000 shares) 114,700
Retained earnings 40,600 12,100
Total stockholders' equity 155,300
126,800
114,700
Total liabilities and stockholders' equity $275,600 $
243,300
Required
Calculate the following ratios for Year 1 and Year 2.
Since opening balance numbers are not presented do
not use averages when calculating the ratios for Year 1.
Instead, use the number presented on the Year 1
balance sheet.
Required data:
Year 2
Return on investment
Return on equity
Accounts receivable turnover
Inventory turnover
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