URGENT !! Use the ratios and the financial information listed below and calculate and comment on 5 of the ratios. Note the industry average for the ratio is given below to aid in your discussion. (A simple answer of the company is better than the industry is not sufficient) Current ratio (current assets / current liabilities) - Industry Average 2 : 1 Working capital (current assets – current liabilities) - Industry Average $60,000 Accounts receivable turnover (net credit sales / average accounts receivable) - Industry Average 17.25 Average collection period (365 days / accounts receivable turnover) – Industry Average 21 Days Inventory turnover (cost of goods sold / average inventory) - Industry Average 8.5 Days in inventory (365 days / inventory turnover) - Industry Average 43 Days Debt to assets ratio (total liabilities / total assets) - Industry Average 45% Free cash flow (net cash provided by operating activities – capital expenditures – cash dividends) - Industry Average $30,000 Gross profit rate (gross profit / net sales) - Industry Average 35% Profit margin (net income / net sales) - Industry Average 20% Return on assets (net income / average total assets) - Industry Average 30% Asset turnover (net sales / average total assets) - Industry Average 2 Payout ratio (cash dividends declared on common stock / net income) - Industry Average 35% Return on common stockholder’s equity (net income – preferred dividends / average common stockholders’ equity) - Industry Average 40% Kinder Company Balance Sheet December 31 2020 2019 Cash $ 40,208 $ 11,424 Accounts receivable (net) 42,896 22,736 Inventory 39,200 47,040 Long-term investments 0 16,800 Property, plant & equipment 264,880 168,000 Accumulated depreciation (42,224) (28,000) $344,960 $238,000 Accounts payable $ 19,040 $ 29,680 Accrued liabilities 23,520 19,040 Long-term notes payable 78,400 56,000 Common stock 145,600 100,800 Retained earnings 78,400 32,480 $344,960 $238,000 Kinder Company Income statement December 31, 2020 Sales Revenue $ 520,285 Cost of Goods Sold (304,045) Gross Profit 216,240 Operating Expenses (137,056) Depreciation Expense (14,224) Gain on Sale of Investment 14,560 Net Income $79,520 Additional data: 1. Paid dividends of $33,600 2. Paid a $44,800 long-term note payable by issuing common stock

URGENT !! Use the ratios and the financial information listed below and calculate and comment on 5 of the ratios. Note the industry average for the ratio is given below to aid in your discussion. (A simple answer of the company is better than the industry is not sufficient) Current ratio (current assets / current liabilities) - Industry Average 2 : 1 Working capital (current assets – current liabilities) - Industry Average $60,000 Accounts receivable turnover (net credit sales / average accounts receivable) - Industry Average 17.25 Average collection period (365 days / accounts receivable turnover) – Industry Average 21 Days Inventory turnover (cost of goods sold / average inventory) - Industry Average 8.5 Days in inventory (365 days / inventory turnover) - Industry Average 43 Days Debt to assets ratio (total liabilities / total assets) - Industry Average 45% Free cash flow (net cash provided by operating activities – capital expenditures – cash dividends) - Industry Average $30,000 Gross profit rate (gross profit / net sales) - Industry Average 35% Profit margin (net income / net sales) - Industry Average 20% Return on assets (net income / average total assets) - Industry Average 30% Asset turnover (net sales / average total assets) - Industry Average 2 Payout ratio (cash dividends declared on common stock / net income) - Industry Average 35% Return on common stockholder’s equity (net income – preferred dividends / average common stockholders’ equity) - Industry Average 40% Kinder Company Balance Sheet December 31 2020 2019 Cash $ 40,208 $ 11,424 Accounts receivable (net) 42,896 22,736 Inventory 39,200 47,040 Long-term investments 0 16,800 Property, plant & equipment 264,880 168,000 Accumulated depreciation (42,224) (28,000) $344,960 $238,000 Accounts payable $ 19,040 $ 29,680 Accrued liabilities 23,520 19,040 Long-term notes payable 78,400 56,000 Common stock 145,600 100,800 Retained earnings 78,400 32,480 $344,960 $238,000 Kinder Company Income statement December 31, 2020 Sales Revenue $ 520,285 Cost of Goods Sold (304,045) Gross Profit 216,240 Operating Expenses (137,056) Depreciation Expense (14,224) Gain on Sale of Investment 14,560 Net Income $79,520 Additional data: 1. Paid dividends of $33,600 2. Paid a $44,800 long-term note payable by issuing common stock

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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Question

URGENT !!

Use the ratios and the financial information listed below and calculate and comment on 5 of the ratios. Note the industry average for the ratio is given below to aid in your discussion. (A simple answer of the company is better than the industry is not sufficient)

Current ratio (current assets / current liabilities) - Industry Average 2 : 1

Working capital (current assets – current liabilities) - Industry Average $60,000

Accounts receivable turnover (net credit sales / average accounts receivable) - Industry Average 17.25

Average collection period (365 days / accounts receivable turnover) – Industry Average 21 Days

Inventory turnover (cost of goods sold / average inventory) - Industry Average 8.5

Days in inventory (365 days / inventory turnover) - Industry Average 43 Days

Debt to assets ratio (total liabilities / total assets) - Industry Average 45%

Free cash flow (net cash provided by operating activities – capital expenditures – cash dividends) - Industry Average $30,000

Gross profit rate (gross profit / net sales) - Industry Average 35%

Profit margin (net income / net sales) - Industry Average 20%

Return on assets (net income / average total assets) - Industry Average 30%

Asset turnover (net sales / average total assets) - Industry Average 2

Payout ratio (cash dividends declared on common stock / net income) - Industry Average 35%

Return on common stockholder’s equity (net income – preferred dividends / average common stockholders’ equity) - Industry Average 40%

Kinder Company
Balance Sheet
	December 31
	2020	2019
Cash	$ 40,208	$ 11,424
Accounts receivable (net)	42,896	22,736
Inventory	39,200	47,040
Long-term investments	0	16,800
Property, plant & equipment	264,880	168,000
Accumulated depreciation	(42,224)	(28,000)
	$344,960	$238,000

Accounts payable	$ 19,040	$ 29,680
Accrued liabilities	23,520	19,040
Long-term notes payable	78,400	56,000
Common stock	145,600	100,800
Retained earnings	78,400	32,480
	$344,960	$238,000

Kinder Company
Income statement
December 31, 2020
Sales Revenue		$ 520,285
Cost of Goods Sold		(304,045)
Gross Profit		216,240
Operating Expenses		(137,056)
Depreciation Expense		(14,224)
Gain on Sale of Investment		14,560
Net Income		$79,520

Additional data:

1. Paid dividends of $33,600

2. Paid a $44,800 long-term note payable by issuing common stock

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