Exercise 13-13 The condensed financial statements of Sheridan Company for the ye

Question

Exercise 13-13 The condensed financial statements of Sheridan Company for the years 2016 and 2017 are presented below SHERIDAN COMPANY Balance Sheets December 31 (in thousands) 2017 2016 Current assets $330 490 560 130 1,510 410 30 530 Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses $360 420 490 160 1,430 380 30 510 $2,480 $2,350 $810 480 1,060 $2,480 $2,350 Total current assets Property, plant, and equipment (net) Investments Intangibles and other assets Total assets Current liabilities Long-term liabilities Stockholders' equity-common $840 580 1,060 Total liabilities and stockholders' equity

Explanation / Answer

(Net Income / Total assets) * 100

RATIOS FORMULA 2017 2016 Current Ratio Current assets / Current Liabilities 1,510 / 840 = 1.79:1 1,430 / 810 = 1.76:1 Inventory Turnover Cost of goods sold / Average Inventory 990/ 490 = 2.02 times 910 / 420 = 2.16 times Profit Margin (Net Income / Sales Revenue) *100 300 / 3,900 = 7.69% 180 / 3,560 =5.05% Return on assets

(Net Income / Total assets) * 100

(300 / 2480) * 100 = 12.09% (180 / 2350) * 100 = 7.65% Return on common stockholders' equity (Net Income / Shareholder's Equity) * 100 (300 / 1060) * 100 = 28.30% (180 / 1060) * 100 = 16.98% Debt to assets ratio (Total Debt / Total assets) * 100 1420 / 2480 = 0.57% 1290 / 2350 = 54.89% Times Interest earned Net Income / Total interest 300/10 = 30times 180/20 = 9times

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