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Question
In: Finance
Condensed balance sheet and income statement data for Landwehr Corporation appear below.
Condensed balance sheet and income statement data for Landwehr Corporation appear below.
Additional information:
1. The market price of Landwehr’s common stock was $4.00, $5.00, and $8.00 for 2016, 2017, and 2018, respectively.
2. All dividends were paid in cash.
Instructions
(a) Compute the following ratios for 2017 and 2018.
(1) Profit margin.
(2) Asset turnover.
(3) Earnings per share. (Weighted-average common shares in 2018 were 32,000 and in 2017 were 31,000.)
(4) Price-earnings ratio.
(5) Payout ratio.
(6) Debt to assets ratio.
(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2017 to 2018 of Landwehr Corporation.
Solutions
Expert Solution
a.
| Ratios | Formula | Calculation /Result | |
| 2017 | 2018 | ||
| 1) Profit Margin | Net income /Net sales | 30000/700000 .0429 or 4.29% |
45000/740000 .0608 or 6.08% |
| 2) Asset turnover | Net sales /Average asset invested | 700000/566500 1.24 |
740000/620000 1.19 |
| 3) Earning per share | [Net income -preferred dividend paid if any/weighted average common shares outstanding] | 30000/31000 $ .97 per share |
45000/32000 = $ 1.41 per share |
| 4) Price earning ratio | Market price per share /Earning per share | 5/.97 5.15 |
8/1.41 5.67 |
| 5) Payout ratio | Dividend /Net income | 18000/30000 60% |
25000/45000 55.56% |
| 6) Debt to asset ratio | Total liabilities /total asset | [80000+85000]/600000 165000/600000 27.5% |
[75000+80000]/640000 155000/640000 24.22% |
b.
Working :
2) Average asset invested = [Beginning asset +ending asset] /2
2017= [533000+600000]/ 2 =566500
2018 = [600000+640000]/2 = 620000
5) Dividend Paid =Beginning retained earning +Net income in current year -ending retained earning
2017 = 113000+30000-125000 = 18000
2018 = 125000+45000-145000= 25000
a.
| Ratios | Formula | Calculation /Result | |
| 2017 | 2018 | ||
| 1) Profit Margin | Net income /Net sales | 30000/700000 .0429 or 4.29% |
45000/740000 .0608 or 6.08% |
| 2) Asset turnover | Net sales /Average asset invested | 700000/566500 1.24 |
740000/620000 1.19 |
Junaid answered 2 years agoRelated Solutions
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Condensed balance sheet and income statement data for Swifty
Corporation appear below:
SWIFTY CORPORATION
Balance Sheet
December 31
2021
2020
2019
Cash
$ 27,500
$ 23,500
$ 18,500
Accounts receivable
50,500
50,000
48,500
Other current assets
94,500
95,500
65,000
Property, plant, and equipment (net)
530,000
471,500
401,000
$702,500
$640,500
$533,000
Current liabilities
$ 71,500
$ 77,500
$ 70,000
Long-term debt
77,500
84,500
46,500
Common shares
318,000
280,000
287,000
Retained earnings
235,500
198,500
129,500
$702,500
$640,500
$533,000
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Income Statement...
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Condensed balance sheet and income statement data for Landwehr
Corporation appear below.
LANDWEHR CORPORATION
Balance Sheets
December 31
2018
2017
2016
Cash
$ 25,000
$ 20,000
$ 18,000
Accounts receivable (net)
50,000
45,000
48,000
Other current assets
90,000
95,000
64,000
Investments
75,000
70,000
45,000
Plant and equipment (net)
400,000
370,000
358,000
Total Assets
$640,000
$600,000
$533,000
Current liabilities
$ 75,000
$ 80,000
$ 70,000
Long-term debt
80,000
85,000
50,000
Common stock, $10 par
340,000
310,000
300,000
Retained earnings
145,000
125,000...
Problem 18-3A Condensed balance sheet and income statement data for Landwehr Corporation appear below. LANDWEHR CORPORATION...
Problem 18-3A
Condensed balance sheet and income statement data for Landwehr
Corporation appear below.
LANDWEHR CORPORATION
Balance Sheets
December 31
2018
2017
2016
Cash
$ 25,800
$ 17,600
$ 18,700
Accounts receivable (net)
50,500
44,200
47,100
Other current assets
89,600
94,900
63,900
Investments
75,300
71,000
45,100
Plant and equipment (net)
400,500
370,000
358,500
$641,700
$597,700
$533,300
Current liabilities
$75,500
$79,800
$69,400
Long-term debt
79,300
84,100
50,300
Common stock, $10 par
368,000
316,000
304,000
Retained earnings
118,900
117,800
109,600
$641,700
$597,700...
Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance...
Condensed balance sheet and income statement data for Jergan
Corporation are presented here.
Jergan Corporation
Balance Sheets
December 31
2020
2019
2018
Cash
$ 30,600
$ 17,300
$ 17,300
Accounts receivable
(net)
50,900
44,500
48,600
Other current assets
90,100
94,800
64,900
Investments
54,700
70,600
44,600
Plant and equipment
(net)
500,600
370,000
358,700
$726,900
$597,200
$534,100
Current liabilities
$85,600
$79,000
$70,700
Long-term debt
144,200
85,000
50,900
Common stock, $10 par
384,000
319,000
308,000
Retained earnings
113,100
114,200
104,500
$726,900
$597,200
$534,100...
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Condensed balance sheet and income statement data for Jergan
Corporation are presented here.
Jergan Corporation
Balance Sheets
December 31
2020
2019
2018
Cash
$ 30,000
$ 16,600
$ 18,700
Accounts receivable
(net)
49,900
44,600
47,400
Other current assets
90,800
94,500
64,100
Investments
55,400
69,800
44,600
Plant and equipment
(net)
500,100
370,700
357,700
$726,200
$596,200
$532,500
Current liabilities
$84,500
$79,200
$69,800
Long-term debt
144,900
84,800
50,500
Common stock, $10 par
369,000
312,000
315,000
Retained earnings
127,800
120,200
97,200
$726,200
$596,200
$532,500...
Condensed balance sheet and income statement data for Pina Corporation are presented here. PINA CORPORATION Balance...
Condensed balance sheet and income statement data for Pina
Corporation are presented here.
PINA CORPORATION
Balance Sheets
December 31
2022
2021
2020
Cash
$ 32,000
$ 22,000
$ 20,000
Accounts receivable (net)
52,000
47,000
50,000
Other current assets
97,000
102,000
71,000
Investments
62,000
77,000
52,000
Plant and equipment (net)
500,000
370,000
358,000
$743,000
$618,000
$551,000
Current liabilities
$ 87,000
$ 82,000
$ 72,000
Long-term debt
152,000
92,000
57,000
Common stock, $10 par
327,000
317,000
307,000
Retained earnings
177,000
127,000
115,000...
Condensed balance sheet and income statement data for Riverbed Corporation are presented here. RIVERBED CORPORATION Balance...
Condensed balance sheet and income statement data for Riverbed
Corporation are presented here.
RIVERBED CORPORATION
Balance Sheets
December 31
2022
2021
2020
Cash
$ 33,000
$ 23,000
$ 21,000
Accounts receivable (net)
53,000
48,000
51,000
Other current assets
95,000
100,000
69,000
Investments
60,000
75,000
50,000
Plant and equipment (net)
500,000
370,000
358,000
$741,000
$616,000
$549,000
Current liabilities
$ 88,000
$ 83,000
$ 73,000
Long-term debt
150,000
90,000
55,000
Common stock, $10 par
325,000
315,000
305,000
Retained earnings
178,000
128,000
116,000...
Current Attempt in Progress Condensed balance sheet and income statement data for Riverbed Corporation are presented...
Current Attempt in Progress
Condensed balance sheet and income statement data for Riverbed
Corporation are presented here.
RIVERBED CORPORATION
Balance Sheets
December 31
2022
2021
2020
Cash
$ 33,000
$ 23,000
$ 21,000
Accounts receivable (net)
53,000
48,000
51,000
Other current assets
95,000
100,000
69,000
Investments
60,000
75,000
50,000
Plant and equipment (net)
500,000
370,000
358,000
$741,000
$616,000
$549,000
Current liabilities
$ 88,000
$ 83,000
$ 73,000
Long-term debt
150,000
90,000
55,000
Common stock, $10 par
325,000
315,000
305,000
Retained...
Problem 14-3A a Condensed balance sheet and income statement data for Jergan Corporation are presented here....
Problem 14-3A a
Condensed balance sheet and income statement data for Jergan
Corporation are presented here.
Jergan Corporation
Balance Sheets
December 31
2020
2019
2018
Cash
$ 30,500
$ 17,800
$ 17,700
Accounts receivable (net)
50,400
45,200
48,800
Other current assets
89,300
96,000
65,000
Investments
55,400
70,000
45,800
Plant and equipment (net)
499,100
369,200
358,400
$724,700
$598,200
$535,700
Current liabilities
$85,200
$79,300
$70,600
Long-term debt
145,300
84,500
50,700
Common stock, $10 par
330,000
316,000
310,000
Retained earnings
164,200
118,400
104,400...
Below is a condensed Income Statement for the SPECTRE Company for 2018 along with balance sheet...
Below is a
condensed Income Statement for the SPECTRE Company for 2018 along
with balance sheet information
income statement
service revenue
3,660,000
Operating expenses
2,700,000
income b4 income tax
960,000
Income tax expense
288,000
Net income
672,000
Balance sheets
12/31/2018
12/31/2017
Cash
1,317,000
270000
1,047,000
accounts receivable
480,000
360,000
Wages payable
330,000
240,000
Income taxes payable
90,000
165,000
Additional information
a) During the year Sprectre issued common stock for
$420,000
b) Long-term investments were sold by Spectre
during the year...
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