The following financial information is for Frizell Company. FRIZELL COMPANY Bala
ID: 2494237 • Letter: T
Question
The following financial information is for Frizell Company.
FRIZELL COMPANY
Balance Sheets
December 31
Assets
2014
2013
$ 71,700
$ 66,000
54,500
41,500
107,500
90,800
238,800
168,400
23,700
26,200
133,500
133,500
260,800
186,200
$890,500
$712,600
Liabilities and Stockholders’ Equity
$170,000
$102,400
68,000
51,200
41,800
41,800
250,200
170,400
209,400
209,400
151,100
137,400
$890,500
$712,600
FRIZELL COMPANY
Income Statements
For the Years Ended December 31
2014
2013
$895,400
$782,900
646,900
574,100
248,500
208,800
194,300
159,600
$ 54,200
$ 49,200
Additional Information
All sales were on account.
Compute the liquidity and profitability ratios of Frizell Company for 2013 and 2014. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%. If % change is a decrease show the numbers as negative, e.g. -12.61% or (12.61%).)
2013
2014
% Change
LIQUIDITY
2013
2014
% Change
PROFITABILITY
FRIZELL COMPANY
Balance Sheets
December 31
Assets
2014
2013
Cash$ 71,700
$ 66,000
Debt investments (short-term)54,500
41,500
Accounts receivable107,500
90,800
Inventory238,800
168,400
Prepaid expenses23,700
26,200
Land133,500
133,500
Building and equipment (net)260,800
186,200
Total assets$890,500
$712,600
Liabilities and Stockholders’ Equity
Notes payable$170,000
$102,400
Accounts payable68,000
51,200
Accrued liabilities41,800
41,800
Bonds payable, due 2017250,200
170,400
Common stock, $10 par209,400
209,400
Retained earnings151,100
137,400
Total liabilities and stockholders’ equity$890,500
$712,600
Explanation / Answer
2013 2014 % Change LIQUIDITY Current ratio Cash+Debt Short term +Acounts Rec+ Inventory+ Prepaid Exp / Accounts payable+ Accrued Liabilities 392900/93000 = 4.22 :1 462000/109800 = 4.21 :1 -0.24% % Accounts receivables turnover Sales / Average receivable 782900/(90800+89700)/2 = 8.68 times times 895400/(107500+90800)/2 9.03 times 4.03 % Inventory turnover Cost of goods sold / average inventory 574100/(116300+168400)/2 = 4.03 times times 646900/(238800+168400)/2 3.17 times -0.21 % 2013 2014 % Change PROFITABILITY Profit margin Net income / sales 208800/782900 = 26.67% % 248500/895400 = 27.75% 27.75 % 4.05 % Asset turnover Sales / Average assets 782900/(712600+640400)/2 = 1.15 times 895400/(890500+712600)/2 1.12 times -2.61 % Return on assets Net income / assets 49200/(712600+640400)/2 = 7.27% % 54200/(890500+712600)/2 6.76 % -6.99 % Earnings per share Net income / no of shares 49200/20940 = 2.35 54200/20940 = 2.59 $ 10.21 %
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