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Given the following balance sheet and income state...

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Given the following balance sheet and income statement, fill in the ratio values for 2010 and discuss how these results compare with both the industry average and prior average performance of Sophie Enterprises. Sophie Enterprises Consolidated Balance Sheet Years Ended December 31, 2009 and 2010 ASSETS ($ Thousands) 2010 2009 Cash $100 $90 Receivables $220 $170 Inventories $330 $230 Total current assets $650 $490 Property, plant and equipment $1,850 $1,650 Depreciation $350 $225 Net Properties $1,500 $1,425 Intangibles $150 $150 Total assets $2,300 $2,065 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts Payable $85 $105 Short-term bank notes $125 $110 Current portion of long-term debt $75 - Accruals $65 $85 Total current liabilities $350 $300 Long-term debt $625 $540 Deferred taxes $100 $80 Preferred stock(10%, $100 par) $150 $150 Common stock ($2 par, 100,000 issued) $200 $200 Additional paid-in capital $325 $325 Retained earnings $550 $470 Common shareholders' equity $1,075 $995 Total liabilities and shareholders' equity $2,300 $2,065 Sophie Enterprises Consolidated Statement of Income Years Ended December 31, 2009 and 2010 Net Sales $3,500 $2,990 Cost of goods sold $2,135 $1,823 Selling, general and administrative $1,107 $974 expenses Operating profit (Gross profit) $258 $193 Net interest expense $62 $54 Income from operations $196 $139 Income taxes $67 $47 Net income $129 $92 Preferred dividends $15 $15 Net income available for $114 $77 common shares Dividends declared $40 $30 Sophie 2010 Sophie's Average Industry Average Current ratio 2.000 2.200 Quick ratio 1.000 1.100 Receivables turnover 18.000 18.000 Average collection period 20.000 20.000 Total asset turnover 1.500 1.400 Inventory turnover 11.000 12.500 Fixed-asset turnover 2.500 2.400 Equity turnover 3.200 3.000 Gross profit margin 0.400 0.350 Operating profit margin 0.080 0.075 Return on capital 0.107 0.120 Return on equity 0.118 0.126 Return on common equity 0.128 0.135 Debt-equity ratio 0.600 0.500 Debt/Total capital ratio 0.400 0.370 Interest coverage 4.000 4.500 Fixed-charge coverage 3.000 4.000 Cash flow/Long-term debt 0.400 0.450 Cash flow/Total debt 0.250 0.300 Retention rate 0.350 0.400 Note: A Demonstration Problem is attached. The yellow-coded cells are inputs; the other cells are not to be altered.

 

Paper#4036 | Written in 18-Jul-2015

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