innel inanclal Accounting, 8e Help I System Announcements Sheridan Company Balan

Question

innel inanclal Accounting, 8e Help I System Announcements Sheridan Company Balance Sheets December 31 Assets Cash Receivables (net) Other current assets Long-term investments Property, plant, and equipment (net) Total assets 2017 2016 $29,050 21,050 76,500 104,50087,500 60,000 484,500 729,550 84,500 62,000 524,500 $804,550 bilities an Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity $ 76,050 71,050 94,500104,500 314,500 239,500 $ 804,550 729,550 344,500 289,500 Sheridan Company Income Statements For the Years Ended December 31 2017 $762,000 $701,000 440,000 400,000 240,000 220,000 $82,000 81,000 2016 Sales revenue Cost of goods sold Operating expenses (including income taxes) Net income Additional information: $97,950 $57,050 $46,050 $38,000 $32,000 $16,050 33,000 30,000 Net cash from operating activities Cash used for capital expenditures Dividends paid on common shares Weighted-average number of shares outstanding

Explanation / Answer

a). Earning Per Share ;-

2017 = (Net Income - Dividend paid) / No. of Shares Outstanding

= ($82000 - $32000) / 33000 shares

= $50000 / 33000 shares

= $1.515

2016 = ($81000 - $16050) / 30000

= $64950 / $30000

= $2.165

b). Working Capital :-

2017 = Current assets - Current Liabilities

= (Cash + Receivables + Other Current assets) - Current Liabilities

= ($29050+$84500+$104500) - $76050

= $142000

2016 = ($21050+$76500+$87500) -$71050

= $114000

Current Ratio :-

2017 = Current Assets / Current liabilities

= ($29050+$84500+$104500) / $76050

= 2.87 time

2016 = ($21050+$76500+$87500) / $71050

= 2.60 time

d) Dabt to Assets Ratio :-

2017 = Total Liabilities / Total Assets

= ($76050+$94500) / $804550

= 0.212 or 21.20%

2016 = ($71050+104500) / $729550

= 0.2406 or 24.06%

e) Free Cash Flow :-

2017 = Cash from Operating activity - Capital Expenditures

= $97950 - $46050

= $51900

2016 = $57050 - $38000

= $19050

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