In: Accounting
The comparative statements of Oriole Company are presented
here.
ORIOLE COMPANY |
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---|---|---|---|---|
2022 |
2021 |
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Net sales |
$2,067,400 |
$1,925,000 |
||
Cost of goods sold |
1,147,000 |
1,126,720 |
||
Gross profit |
920,400 |
798,280 |
||
Selling and administrative expenses |
560,000 |
536,480 |
||
Income from operations |
360,400 |
261,800 |
||
Other expenses and losses |
||||
Interest expense |
24,640 |
22,400 |
||
Income before income taxes |
335,760 |
239,400 |
||
Income tax expense |
100,728 |
71,820 |
||
Net income |
$ 235,032 |
$ 167,580 |
ORIOLE COMPANY |
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---|---|---|---|---|
Assets |
2022 |
2021 |
||
Current assets |
||||
Cash |
$ 67,312 |
$ 71,904 |
||
Debt investments (short-term) |
82,880 |
56,000 |
||
Accounts receivable |
131,936 |
115,136 |
||
Inventory |
141,120 |
129,360 |
||
Total current assets |
423,248 |
372,400 |
||
Plant assets (net) |
726,880 |
582,736 |
||
Total assets |
$1,150,128 |
$955,136 |
||
Liabilities and Stockholders’ Equity |
||||
Current liabilities |
||||
Accounts payable |
$ 179,200 |
$162,848 |
||
Income taxes payable |
48,720 |
47,040 |
||
Total current liabilities |
227,920 |
209,888 |
||
Bonds payable |
246,400 |
224,000 |
||
Total liabilities |
474,320 |
433,888 |
||
Stockholders’ equity |
||||
Common stock ($5 par) |
324,800 |
336,000 |
||
Retained earnings |
351,008 |
185,248 |
||
Total stockholders’ equity |
675,808 |
521,248 |
||
Total liabilities and stockholders’ equity |
$1,150,128 |
$955,136 |
All sales were on account. Net cash provided by operating
activities for 2022 was $246,400. Capital expenditures were
$152,320, and cash dividends were $69,272.
Compute the following ratios for 2022. (Round all
answers to 2 decimal places, e.g. 1.83 or
1.83%.)
(a) | Earnings per share |
$enter earnings per share in dollars |
|||
(b) | Return on common stockholders’ equity |
enter return on common stockholders’ equity in percentages |
% | ||
(c) | Return on assets |
enter return on assets in percentages |
% | ||
(d) | Current ratio |
enter current ratio |
:1 | ||
(e) | Accounts receivable turnover |
enter accounts receivable turnover in times |
times | ||
(f) | Average collection period |
enter average collection period in days |
days | ||
(g) | Inventory turnover |
enter inventory turnover in times |
times | ||
(h) | Days in inventory |
enter days in inventory |
days | ||
(i) | Times interest earned |
enter times interest earned |
times | ||
(j) | Asset turnover |
enter asset turnover in times |
times | ||
(k) | Debt to assets ratio |
enter debt to assets ratio in percentages |
% | ||
(l) | Free cash flow |
$enter free cash flow in dollars |
a)
Earnings per share = Net income / Common stock outstanding |
||
$235,032 / 66,080 |
||
$3.56 |
per share |
|
Average common stock = (Beginning common stock + Ending common stock) / 2 |
||
($336,000 + $324,800) / 2 |
||
$330,400 |
||
Common stock outstanding = Average Common stock / Par value |
||
$300,400 / $5 = 66,080 |
b)
Return on Common stockholder's equity = Net income / Average Common stockholder's equity * 100 |
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$235,032 / $598,528 * 100 |
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39.27% |
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Average Stockholder's equity = (Beginning equity + Ending equity) / 2 |
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($521,248 + $675,808) / 2 |
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$598,528 |
c)
Return on assets = Net income / Average assets * 100 |
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$235,032 / $1,052,632 * 100 |
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22.33% |
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Average assets = (Beginning assets + Ending assets) / 2 |
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($955,136 + $1,150,128) / 2 |
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$1,052,632 |
d)
Current ratio = Total current assets / Total current liabilities |
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$423,248 / $227,920 |
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1.86 to 1 |
e)
Accounts receivable turnover = Net credit sales / Average receivables |
|||
$2,067,400 / $123,536 |
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16.74 times |
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Average receivable = (Beginning receivables + Ending receivables) / 2 |
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($115,136 + $131,936) / 2 |
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$123,536 |
f)
Number of days sales in receivable = No. of days in year / Accounts receivables turnover ratio |
|||
365 / 16.74 |
|||
21.80 days |
g)
Inventory turnover = Cost of goods sold / Average Inventory |
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$1,147,000 / $135,240 |
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8.48 times |
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Average inventory = (Beginning inventory + Ending inventory) / 2 |
|||
($129,360 + $141,120) / 2 |
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$135,240 |
h)
Days in inventory = No. of days in year / Inventory turnover ratio |
|||
365 / 8.48 |
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43.04 days |
i)
Time interest earned = Income from operations / Interest expenses |
|||
$360,400 / $24,640 |
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14.63 |
times |
||
j)
Total assets turnover = Sales / Average operating assets |
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$2,067,400 / $1,052,632 |
|||
1.96 |
times |
k)
Debt to assets ratio = Total liabilities / Total assets * 100 |
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$474,320 / $1,150,128 * 100 |
|||
41.24% |
l)
Free cash flow = Net cash provided by operating activities - Capital expenditures - Dividends |
|||
$246,400 - $152,320 - $69,272 |
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$24,808 |