Question

The condensed financial statements of Oriole Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.)

ORIOLE COMPANY Balance Sheets December 31
		2020		2019
Current assets
Cash and cash equivalents		$330		$360
Accounts receivable (net)		660		590
Inventory		600		530
Prepaid expenses		120		160
Total current assets		1,710		1,640
Investments		200		200
Property, plant, and equipment		420		380
Intangibles and other assets		530		510
Total assets		$2,860		$2,730
Current liabilities		$1,090		$980
Long-term liabilities		550		520
Stockholders’ equity—common		1,220		1,230
Total liabilities and stockholders’ equity		$2,860		$2,730

ORIOLE COMPANY Income Statements For the Years Ended December 31
		2020		2019
Sales revenue		$3,940		$3,600
Costs and expenses
Cost of goods sold		1,145		1,080
Selling & administrative expenses		2,400		2,330
Interest expense		25		20
Total costs and expenses		3,570		3,430
Income before income taxes		370		170
Income tax expense		111		51
Net income		$ 259		$ 119

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.
(b)		Inventory turnover. (Inventory on 12/31/18, was $360.)
(c)		Profit margin.
(d)		Return on assets. (Assets on 12/31/18, were $2,290.)
(e)		Return on common stockholders’ equity. (Stockholders’ equity on 12/31/18, was $980.)
(f)		Debt to assets ratio.
(g)		Times interest earned.

		2020			2019
(a) Current ratio			:1			:1
(b) Inventory turnover			times			times
(c) Profit margin			%			%
(d) Return on assets			%			%
(e) Return on common stockholders’ equity			%			%
(f) Debt to assets ratio			%			%
(g) Times interest earned			times			times

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.