Q2 10 BONUS POINTS Consolidated balance sheet and income statement data for Land
ID: 2570373 • Letter: Q
Question
Q2 10 BONUS POINTS Consolidated balance sheet and income statement data for Landwehr Corporation appear below LANDWEHR CORPORATION Balance Sheets December 31 2018 2017 2016 Cash Accounts receivable (net) Other current assets Investments $25,000 50,000 90,000 75,000 400,000 $640,000 $75,000 80,000 340,000 145,000 $640,000 $20,000 45,000 95,000 70,000 370,000 $600,000 $80,000 85,000 310,000 125,000 $600,000 $18,000 48,000 64,000 45,000 358,000 $533,000 $70,000 50,000 300,000 113,000 $533,000 Plant and equipment (net) Current liabilities Long-term debt Common stock, $10 par Retained earnings LANDWEHR CORPORATION Income Statement For the Years Ended December 31 2018 2017 Sales revenue Less: Sales returns and allowances Net sales Cost of goods sold Gross Profit Operating expenses (including income tax) Net income $740,000 40,000 700,000 420,000 280,000 235,000 $45,000 $700,000 50,000 650,000 400,000 250,000 220,000 $30,000 Additional information: 1. The market price of Landwehr's common stock was $4.00, $5.00, and $8,00 for 2016, 2017, and 2018, respectively 2. All dividends were paid in cashExplanation / Answer
Solution:
(a)(1)
Profit Margin:
2017
2018
Net Income (A)
$30,000
$45,000
Net Sales (B)
$650,000
$700,000
Profit Margin (A/B*100)
4.62%
6.43%
(a)(2)
Asset Turnover:
2017
2018
2016 Total Assets
$533,000
2017 Total Assets
$600,000
$600,000
2018 Total Assets
$640,000
Average Total Assets
$566,500
$620,000
2017
2018
Net Sales (A)
$650,000
$700,000
Average Total Assets (B)
$566,500
$620,000
Asset Turnover (A/B)
1.15
1.13
(a)(3)
Earnings per Share:
2017
2018
Net Income (A)
$30,000
$45,000
Weighted Average Common Share outstanding (B)
31000
32000
Earnings Per Share (A/B)
$0.97
$1.41
(a)(4)
Price earnings ratio
2017
2018
Market Price per Share (A)
$5.00
$8.00
Earnings Per Share (B)
$0.97
$1.41
Price earnings ratio (A/B)
5.17
5.69
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(a)(1)
Profit Margin:
2017
2018
Net Income (A)
$30,000
$45,000
Net Sales (B)
$650,000
$700,000
Profit Margin (A/B*100)
4.62%
6.43%
(a)(2)
Asset Turnover:
2017
2018
2016 Total Assets
$533,000
2017 Total Assets
$600,000
$600,000
2018 Total Assets
$640,000
Average Total Assets
$566,500
$620,000
2017
2018
Net Sales (A)
$650,000
$700,000
Average Total Assets (B)
$566,500
$620,000
Asset Turnover (A/B)
1.15
1.13
(a)(3)
Earnings per Share:
2017
2018
Net Income (A)
$30,000
$45,000
Weighted Average Common Share outstanding (B)
31000
32000
Earnings Per Share (A/B)
$0.97
$1.41
(a)(4)
Price earnings ratio
2017
2018
Market Price per Share (A)
$5.00
$8.00
Earnings Per Share (B)
$0.97
$1.41
Price earnings ratio (A/B)
5.17
5.69
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