Use the following information to answer the following questions.
ABC, Inc. Income Statement (in thousands)
December 31, 2014
Sales $200,000
Cost of goods sold 140,000
Gross profit on sales 60,000
Operating expenses 56,000
Operating income (EBIT) 4,000
Interest expense 1,000
Earnings before tax 3,000
Income tax 1,050
Net income available to common stockholders $1,950
Number of shares outstanding 1, 500
Market price per share $22
ABC, Inc. Balance Sheet (in thousands)
December 31, 2014
Assets
Cash $2,000
Accounts receivable 17,800
Inventories 8,700
Total current assets 28,500
Gross fixed assets 70,000
Accumulated depreciation 26,500
Net fixed assets 43,500
Total assets $72,000
Liabilities and Equity
Accounts payable $18,000
Accruals 13,350
Total current liabilities 31,350
Long-term debt 8,250
Total liabilities 39,600
Common stock (par value and paid in capital) 2,000
Retained earnings 30,400
Total stockholders' equity 32,400
Total liabilities and equity $72,000
Industry Key Ratios
Industry Average Ratios
Current ratio 1.1
Quick ratio 0.60
Days Sales Outstanding (DSO) 25 days
Fixed assets turnover 5.8
Total asset turnover 2.95
Liabilities-to-assets ratio 65%
Times-interest-earned 3.2
Net profit margin 1.3%
Return on equity 7.32%
Price/earnings ratio 20.38
Market/book ratio 3.19
Calculate current ratio and acid test ratio for the firm.
Calculate DSO, fixed assets turnover, and total asset turnover for the firm.
Calculate liabilities-to-assets ratio and times-interest-earned ratio for the firm.
Calculate net profit margin and return on equity for the firm.
Evaluate the performance of the firm in the following areas:
Liquidity management
Asset management
Debt management
Profitability management
When you explain the firm
Use the following information to answer the following questions.
ABC, Inc. Income Statement (in thousands)
December 31, 2014
Sales $200,000
Cost of goods sold 140,000
Gross profit on sales 60,000
Operating expenses 56,000
Operating income (EBIT) 4,000
Interest expense 1,000
Earnings before tax 3,000
Income tax 1,050
Net income available to common stockholders $1,950
Number of shares outstanding 1, 500
Market price per share $22
ABC, Inc. Balance Sheet (in thousands)
December 31, 2014
Assets
Cash $2,000
Accounts receivable 17,800
Inventories 8,700
Total current assets 28,500
Gross fixed assets 70,000
Accumulated depreciation 26,500
Net fixed assets 43,500
Total assets $72,000
Liabilities and Equity
Accounts payable $18,000
Accruals 13,350
Total current liabilities 31,350
Long-term debt 8,250
Total liabilities 39,600
Common stock (par value and paid in capital) 2,000
Retained earnings 30,400
Total stockholders' equity 32,400
Total liabilities and equity $72,000
Industry Key Ratios
Industry Average Ratios
Current ratio 1.1
Quick ratio 0.60
Days Sales Outstanding (DSO) 25 days
Fixed assets turnover 5.8
Total asset turnover 2.95
Liabilities-to-assets ratio 65%
Times-interest-earned 3.2
Net profit margin 1.3%
Return on equity 7.32%
Price/earnings ratio 20.38
Market/book ratio 3.19
Calculate current ratio and acid test ratio for the firm.
Calculate DSO, fixed assets turnover, and total asset turnover for the firm.
Calculate liabilities-to-assets ratio and times-interest-earned ratio for the firm.
Calculate net profit margin and return on equity for the firm.
Evaluate the performance of the firm in the following areas:
Liquidity management
Asset management
Debt management
Profitability management
When you explain the firm
Related questions
| Millions of USD (except for per share items) | 2015 | 2014 | |
| Sales | $ 114,826 | $ 114,960 | |
| Cost of Goods Sold | 86,483 | 86,714 | |
| Gross Profit | 28,343 | 28,246 | |
| Selling/General/Admin. Expenses, Total | 22,663 | 22,053 | |
| Operating Income | 5,680 | 6,193 | |
| Interrest and Taxes | 2,336 | 2,600 | |
| Net Income | $ 3,344 | $ 3,593 | |
| Market Price/Share | $ 65.68 | $ 84.26 | |
| Shares Outstanding | 3,210 | 3,210 |
| Millions of USD (except for per share items) | As of 2015 | As of 2014 |
| Cash & Equivalents | $ 7,759 | $ 6,012 |
| Total Receivables, Net | 5,813 | 6,096 |
| Total Inventory | 46,310 | 45,315 |
| Prepaid Expenses | 2,251 | 1,811 |
| Total Current Assets | 62,133 | 59,687 |
| Property/Plant/Equipment, Total - Gross | 138,614 | 142,830 |
| Total Assets | $ 200,747 | $ 202,517 |
| Accounts Payable | 37,224 | 36,347 |
| Accrued Expenses | 18,685 | 17,807 |
| Notes Payable/Short Term Debt | 799 | 3,517 |
| Current Port. of LT Debt/Capital Leases | 6,468 | 3,566 |
| Other Current liabilities, Total | 6,448 | 6,684 |
| Total Current Liabilities | 69,624 | 67,921 |
| Total Long Term Debt | 42,964 | 48,233 |
| Deferred Income Tax | 8,169 | 8,164 |
| Minority Interest | 3,416 | 5,111 |
| Total Liabilities | 124,173 | 129,429 |
| Total Equity | 76,574 | 73,088 |
| Total Liabilities & Shareholders' Equity | 200,747 | 202,517 |
| - | - | |
| Total # Common Shares Outstanding | $ 3,227 | $ 3,230 |
| Category | Two Ratios from Each Category | Ratio | Formula | 2015 | 2014 | |
| Liquidity | Current and Quick Ratio | Current | Current Assests/Current Liabilites | |||
| Quick | (CA - Inventories)/Current Liabilites | |||||
| Asset Management | Total Assets Turnover, Total Fixed Asset Turnover | Total Assets Turnover, | Sales/Total Assets | |||
| Total Fixed Asset Turnover | Sales/Total Fixed Assets | |||||
| Debt Management | Debt to Assets and Debt to Equity | Debt to Assets | Total Liabilities / Total Assests | |||
| Debt to Equity | Total Liabilities / Common Stockholders Equity | |||||
| Profitability Ratio | Return on Assets and Return on Equity | Return on Assets | Net Income/Total Assets | |||
| Return on Equity | Net Income/Common Equity | |||||
| Market Ratio | Earnings Per Share and Price to Earnings Ratio | Earnings Per Share | Net Income / Common Shares Outstanding | |||
| Price to Earnings Ratio | Market Price of Shares/Earning Per Share |
The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
| Tax rate | 40% | |
| Stock price | $17.00 | |
| Shares outstanding | 3,800,000 | |
| Dividends are 50% of net income | ||
| Income Statement | ||||||
| Period Ending | 31-Dec-13 | |||||
| Total Revenue | 148,239,000 | |||||
| COGS | 118,094,000 | |||||
| Selling General and Administrative | 13,384,000 | |||||
| Depreciation | 72,000 | |||||
| Earnings Before Interest And Taxes | 16,689,000 | |||||
| Interest Expense | 829,000 | |||||
| Income Before Tax | 15,860,000 | |||||
| Income Tax Expense (40%) | 6,344,000 | |||||
| Net Income | 9,516,000 | |||||
| Balance Sheet | ||||||
| Date | 31-Dec-13 | |||||
| Assets | ||||||
| Current Assets | ||||||
| Cash | 14,468,000 | |||||
| Net Receivables | 98,359,000 | |||||
| Inventory | 18,758,000 | |||||
| Total Current Assets | 131,585,000 | |||||
| Property Plant and Equipment | 70,441,000 | |||||
| Total Assets | 202,026,000 | |||||
| Liabilities | ||||||
| Current Liabilities | ||||||
| Accounts Payable | 22,446,500 | |||||
| Accruals | 14,315,500 | |||||
| Notes Payable | 3,631,000 | |||||
| Total Current Liabilities | 40,393,000 | |||||
| Long Term Debt | 134,919,000 | |||||
| Total Liabilities | 175,312,000 | |||||
| Stockholders' Equity | ||||||
| Common Stock | 40,000 | |||||
| Retained Earnings | 26,674,000 | |||||
| Total Stockholder Equity | 26,714,000 | |||||
| Total Assets | 202,026,000 | |||||
| Question/Problem Calculate the common size balance sheet and the common size income statement for the company. | ||||||
