Question

The comparative statements of Wahlberg Company are presented here.

Wahlberg Company Income Statement For the Years Ended December 31
		2020			2019
Net sales		$1,813,300			$1,745,300
Cost of goods sold		1,010,100			994,000
Gross profit		803,200			751,300
Selling and administrative expenses		512,200			481,600
Income from operations		291,000			269,700
Other expenses and losses
Interest expense		18,700			14,000
Income before income taxes		272,300			255,700
Income tax expense		82,022			77,800
Net income		$ 190,278			$ 177,900

Wahlberg Company Balance Sheets December 31
Assets		2020			2019
Current assets
Cash		$59,500			$64,500
Debt investments (short-term)		70,800			50,500
Accounts receivable		117,900			101,500
Inventory		123,000			115,600
Total current assets		371,200			332,100
Plant assets (net)		600,700			516,300
Total assets		$971,900			$848,400
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$159,000			$144,100
Income taxes payable		42,200			41,200
Total current liabilities		201,200			185,300
Bonds payable		220,000			200,000
Total liabilities		421,200			385,300
Stockholders’ equity
Common stock ($5 par)		276,800			299,800
Retained earnings		273,900			163,300
Total stockholders’ equity		550,700			463,100
Total liabilities and stockholders’ equity		$971,900			$848,400

All sales were on account. Net cash provided by operating activities for 2020 was $216,000. Capital expenditures were $132,000, and cash dividends were $79,678.

Compute the following ratios for 2020. (Round Earnings per share, Current ratio and Asset turnover to 2 decimal places, e.g. 1.65 or 1.65:1, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%. Use 365 days for calculation.)

(a)		Earnings per share		$
(b)		Return on common stockholders’ equity			%
(c)		Return on assets			%
(d)		Current ratio			:1
(e)		Accounts receivable turnover			times
(f)		Average collection period			days
(g)		Inventory turnover			times
(h)		Days in inventory			days
(i)		Times interest earned			times
(j)		Asset turnover			times
(k)		Debt to assets ratio			%
(l)		Free cash flow		$

Answer 1

earnings per share	(net income – preferred dividend)/shares outstanding
	2020 ($)
net income	190278
preferred dividend	0
shares outstanding	55360
earnings per share	3.44
return on common stockholders equity	(net income – preferred dividend)/average common stockholders equity
	2020 ($)
net income	190278
preferred dividend	0
opening stockholders equity	463100
closing stockholders equity	550700
average stockholders equity	506900
return on common stockholders equity	37.5%
return on assets	net income / average total assets
	2020 ($)
net income	190278
opening total assets	848400
closing total assets	971900
average total assets	910150
return on assets	20.9%
current ratio	current assets / current liabilities
	2020 ($)
total current assets	371200
total current liabilities	332100
current ratio	1.12
accounts receivable turnover	Sales / average accounts receivable
	2020 ($)
sales	1813300
opening accounts receivable	101500
closing accounts receivable	117900
average accounts receivable	109700
accounts receivable turnover	16.5
average collection period	365 days / accounts receivable turnover
	2020 ($)
accounts receivable turnover	16.5
average collection period	22.1
inventory turnover	cost of goods sold / average inventory
	2020 ($)
cost of goods sold	1010100
opening inventory	115600
closing inventory	123000
average inventory	119300
inventory turnover	8.5
days in inventory	365 days / inventory turnover
	2020 ($)
inventory turnover	8.5
days in inventory	42.9