Question

Materials, Inc.

Consolidated Statements of Income

For the Last Four Fiscal Years of Operations (000’s $)

20x3 20x2 20x1 20x0

NetSales $93,000 $89,460 $83,200 $72,410

Cost ofSales 70,600 68,440 64,480 55,760

GrossProfit 22,400 21,020 18,720 16,650

Selling, G&A Expenses 9,300 9,390 8,320 7,600

Operating Profit 13,100 11,630 10,400 9,050

Interest Expense (470) (450) (420) (150)

InterestIncome 90 90 80 70

G(L) on Sale of Assets 2,450 2,710 2,420 370

Income Before Taxes 15,170 13,980 12,480 9,340

Provision for Taxes 5,110 4,920 4,160 3,260

NetIncome $10,060 $ 9,060 $8,320 $ 6,080

EOC Quiz Requirements:

Based upon the Income Statement and Balance Sheet data, completethe requested liquidity, solvency and profitability ratios.

Southwest Materials, Inc.

Consolidated Balance Sheets

For the Last Four Fiscal Years of Operations (000’s $)

20x3 20x2 20x1 20x0

Assets

Current Assets

Cash & Cash Equivalents $4,270 $ 3,640 $ 420 $ 470

Accounts Receivable, Net 12,000 11,31010,470 9,420

Inventories 4,000 3,840 3,870 2,950

PrepaidExpense 900 750 660 520

Total CurrentAssets 21,17019,540 15,420 13,360

Property, Plant & Equipment

Land 21,770 20,110 18,910 17,460

Plant &Equipment 101,390 94,750 89,560 76,190

Gross P. P. &E. 123,160 114,860 108,470 93,650

Less: Accum Depreciation 56,010 51,22047,650 41,160

Net Property, Plant & Equip 67,150 63,64060,820 52,490

Goodwill 7,000 6,830 6,140 5,870

OtherAssets 5,000 4,380 3,880 3,800

TotalAssets $100,320 $ 94,390 $86,260 $ 75,520

Liabilities & Equity

Current Liabilities

Accounts Payable $ 5,400 $ 5,320 $5,260 $ 5,200

AccruedLiabilities 4,300 4,320 4,360 7,960

Current Portion L-T-Debt 950 1,140 470 290

Total Current Liabilities 10,650 10,78010,090 13,450

Long-Term Liabilities

Long-TermDebt 11,500 15,120 18,950 11,560

Deferred IncomeTaxes 7,500 6,910 4,820 3,990

Accrued Employee Benefits 3,500 3,610 3,410 3,680

Total Long-Term Liabilities 22,500 25,64027,180 19,230

TotalLiabilities 33,150 36,420 37,270 32,680

Stockholders’ Equity

Common Stock, $0.10 Par Val 240 240 240 240

Capital in Excess of Par 2,350 2,350 2,350 2,350

RetainedEarnings 64,880 56,020 48,120 40,730

Less Cost of Treasury Stock (300) (640) (1,720) (480)

Total Stockholders’ Equity 67,170 57,97048,990 42,840

Total Liabilities & Equity $100,320 $94,390 $ 86,260 $ 75,520

Southwest Materials, Inc. – Requested Ratios

20x2 20x1 20x0

Liquidity Ratios:

CurrentRatio __________ __________ __________

Acid-TestRatio __________ __________ __________

Accounts Rec Turnover Ratio __________ __________ __________

Inventory Turnover Ratio __________ __________ __________

Days’ Sales Uncollected __________ __________ __________

Days’ Sales in Inventory __________ __________ __________

Cash-to-Cash Operating Cycle __________ __________ __________

Note: Use the Alternate Equations Presented in the PowerPointsfor

Days’ Sales Uncollected, Days’Sales in Inventory,

and Cash-to-Cash OperatingCycle

Total AssetTurnover __________ __________ __________

Solvency Ratios:

DebtRatio __________ __________ __________

EquityRatio __________ __________ __________

Debt-to-EquityRatio __________ __________ __________

Times Interest Earned Ratio __________ __________ __________

Profitability Ratios:

Gross MarginRatio __________ __________ __________

Operating Income Margin Ratio __________ __________ __________

Profit MarginRatio __________ __________ __________

Note: Use the Equation Presented in the PowerPoints for the

Operating Income Margin Ratio

Return on Total Assets __________ __________ __________

Return onEquity __________ __________ __________