Financial statements for Revnik Company follow. REVNIK COMPANY Balance Sheets As
ID: 2486850 • Letter: F
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Financial statements for Revnik Company follow. REVNIK COMPANY Balance Sheets As of December 31 2015 2014 Assets Current assets Cash $ 26,000 $ 22,000 Marketable securities 22,000 8,000 Accounts receivable (net) 61,000 53,000 Inventories 146,000 154,000 Prepaid items 25,000 10,000 Total current assets 280,000 247,000 Investments 32,000 25,000 Plant (net) 265,000 250,000 Land 30,000 25,000 Total assets $ 607,000 $ 547,000 Liabilities and Stockholders’ Equity Liabilities Current liabilities Notes payable $ 47,600 $ 19,300 Accounts payable 83,800 70,000 Salaries payable 23,000 17,000 Total current liabilities 154,400 106,300 Noncurrent liabilities Bonds payable 120,000 120,000 Other 26,000 21,000 Total noncurrent liabilities 146,000 141,000 Total liabilities 300,400 247,300 Stockholders’ equity Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) 80,000 80,000 Common stock (No par; 50,000 shares authorized; 10,000 shares issued) 80,000 80,000 Retained earnings 146,600 139,700 Total stockholders’ equity 306,600 299,700 Total liabilities and stockholders’ equity $ 607,000 $ 547,000 REVNIK COMPANY Statements of Income and Retained Earnings For the Years Ended December 31 2015 2014 Revenues Sales (net) $ 430,000 $ 410,000 Other revenues 12,000 9,000 Total revenues 442,000 419,000 Expenses Cost of goods sold 215,000 163,000 Selling, general, and administrative 75,000 70,000 Interest expense 14,000 13,200 Income tax expense 123,000 122,000 Total expenses 427,000 368,200 Net earnings (net income) 15,000 50,800 Retained earnings, January 1 139,700 97,000 Less: Preferred stock dividends 3,200 3,200 Common stock dividends 4,900 4,900 Retained earnings, December 31 $ 146,600 $ 139,700 Required Calculate the following ratios for 2015 and 2014. When data limitations prohibit computing averages, use year-end balances in your calculations. a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, 2014, were $54,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, 2014, was $160,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole number.) h. Debt to assets ratio. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45.)) i. Debt to equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) l. Net margin. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45.)) m. Turnover of assets. (Use the total assets of 2014 as the average total assets to compute the 2014 figure.) (Round your answers to 2 decimal places.) n. Return on investment. (Use the total assets of 2014 as the average total assets to compute the 2014 figure.) (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45.)) o. Return on equity. (Use the total stockholders' equity of 2014 as the average total stockholders' equity to compute the 2014 figure.) (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45.)) p. Earnings per share. (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: 2014, $12.75; 2015, $14.50). (Round intermediate calculations to 2 decimal places and final answers to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal place. (i.e., .2345 should be entered as 23.45.))
Explanation / Answer
Answer a. Working Capital = Current Assets - Current Liabilities 2015 2014 Current Assets Cash 26,000 22,000 Marketable Securities 22,000 8,000 Accounts Receivables (net) 61,000 53,000 Inventories 146,000 154,000 Prepaid Items 25,000 10,000 Total Current Assets (A) 280,000 247,000 Current Liabilities Notes Payables 47,600 19,300 Accounts Payables 83,800 70,000 Salaries Payable 23,000 17,000 Total Current Liabilities (B) 154,400 106,300 Working Capital (A-B) 125,600 140,700 Answer b. Current Ratio = Current Assets / Current Liabilities 2015 2014 Total Current Assets (A) 280,000 247,000 Total Current Liabilities (B) 154,400 106,300 Current Ratio (A/B) 1.81 : 1 2.32 : 1 Answer c. Quick Ratio = Quick Assets / Current Liabilities 2015 2014 Total Current Assets (A) 280,000 247,000 Less: Inventories (146,000) (154,000) Less: Prepaid Items (25,000) (10,000) Quick Assets 109,000 83,000 Total Current Liabilities (B) 154,400 106,300 Quick Ratio 0.71: 1 0.78 : 1 Answer d. Receivables Turnover = Net Credit Sales / Average Accounts Receivables 2015 2014 Net Credit Sales 430,000 410,000 Accounts Receivables Balance as on Dec 31, 2013 54,000 Balance as on Dec 31, 2014 53,000 53,000 Balance as on Dec 31, 2015 61,000 Average Accounts Receivables 57,000 53,500 (Op. Balance + Cls. Balance)/2 Receivable Turnover (In Times) 7.54 7.66 As per Chegg Guidelines, You can ask only one question at a time having four subparts. For other parts or Questions please ask it again.
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