The following are the financial statements for Nederland Consumer Products Compa

Question

The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011.

Nederland Consumer Products Company
Income Statement for the Fiscal Year
Ended September 30, 2011

Net sales $ 67,416
Cost of goods sold 19,822
________
Gross margin $ 47,594
Marketing, research, administrative exp. 13,035
Depreciation 598
________
Operating income(loss) $ 33,961
Interest expense 398
________
Earnings(loss) before income taxes $ 33,563
Income taxes 10,188
________
Net earnings(loss) $ 23,375


Nederland Consumer Products Company
Balance Sheet as of September 30, 2011
Assets: Liabilities and Stockholder's Equity:
Cash and marketable securities $ 6,185 Accounts payable $ 3,673
Investment securities 381 Accrued and other liabilities 8,581
Accounts receivable 3,560 Taxes payable 2,684
Total inventories 3,685 Debt due within one year 7,141
Deferred income taxes 835
Prepaid expenses & other receivables 1,903
____________________________________ ____________________________
Total current assets $ 16,549 Total current liabilities $ 22,079
Property, plant, and equip., at cost 29,796 Long-term debt 11,159
Less: Accumulated depreciation 9,678 Deferred income taxes 2,042
____________________________________ Other non-current liabilities 2,273
Net plant and equipment $ 20,118 ____________________________
Net goodwill & other intangible assets 27,074 Total liabilities $ 37,553
Other non-current assets 2,137 Convertible Class A preferred stock 1,207
Common stock 2,049
Retained earnings 25,069
________
Total stockholders

Explanation / Answer

current ratio= CA/CL= 16,549 /22,079 = .75 quick ratio= (CA- inventories)/CL= (16,549- 3,685) /22,079 = .583 debt ratio= Total debt/TA= 37,553 / 65,878= .57 long term debt ratio= Long-term debt / (Long-term debt + Preferred stock + Common stock)= 11,159 /(11,159 +2,049 +1,207)= .774

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