Reference no: EM131238453

Exercise 1:

Kinder Company has these comparative balance sheet data:

KINDER COMPANY Balance Sheets December 31
		2014		2013
Cash		$ 22,035		$ 44,070
Accounts receivable (net)		102,830		88,140
Inventory		88,140		73,450
Plant assets (net)		293,800		264,420
		$506,805		$470,080
Accounts payable		$ 73,450		$ 88,140
Mortgage payable (15%)		146,900		146,900
Common stock, $10 par		205,660		176,280
Retained earnings		80,795		58,760
		$506,805		$470,080

Additional information for 2014:

1. Net income was $34,900.

2. Sales on account were $391,900. Sales returns and allowances amounted to $29,400.

3. Cost of goods sold was $208,500.

4. Net cash provided by operating activities was $59,300.

5. Capital expenditures were $28,600, and cash dividends were $13,700.

Compute the following ratios at December 31, 2014. (Round all answers to 2 decimal places,

(a) Current ratio.  :1
(b) Accounts receivable turnover.  times
(c) Average collection period.  days
(d) Inventory turnover.  times
(e) Days in inventory.  days
(f) Cash debt coverage ratio.  times
(g) Current cash debt coverage ratio.  times
(h) Free cash flow. $

Exercise 2:

The condensed financial statements of Elliott Company for the years 2013 and 2014 are presented below.

ELLIOTT COMPANY Balance Sheets December 31 (in thousands)
		2014		2013
Current assets
Cash and cash equivalents		$330		$360
Accounts receivable (net)		608		538
Inventory		550		480
Prepaid expenses		130		160
Total current assets		1,618		1,538
Property, plant, and equipment (net)		410		380
Investments		148		148
Intangibles and other assets		530		510
Total assets		$2,706		$2,576
Current liabilities		$958		$928
Long-term liabilities		570		470
Stockholders' equity-common		1,178		1,178
Total liabilities and stockholders' equity		$2,706		$2,576

ELLIOTT COMPANY Income Statements For the Year Ended December 31 (in thousands)
		2014		2013
Sales revenue		$3,890		$3,550
Costs and expenses
Cost of goods sold		1,108		1,028
Selling & administrative expenses		2,400		2,330
Interest expense		10		20
Total costs and expenses		3,518		3,378
Income before income taxes		372		172
Income tax expense		149		69
Net income		$ 223		$ 103

Compute the following ratios for 2014 and 2013. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%.)

(a) Current ratio.
(b) Inventory turnover. (Inventory on December 31, 2012, was $360.)
(c) Profit margin.
(d) Return on assets. (Assets on December 31, 2012, were $2,710.)
(e) Return on common stockholders' equity. (Equity on December 31, 2012, was $950.)
(f) Debt to assets ratio.
(g) Times interest earned.

		2014				2013
Current ratio.			:1					:1
Inventory turnover.
Profit margin.			%					%
Return on assets.			%					%
Return on common stockholders' equity.			%					%
Debt to assets ratio.			%					%
Times interest earned.			times					times

Brief Exercise 3:

Vertical analysis (common-size) percentages for Capuano Company's sales, cost of goods sold, and expenses are listed here.

Vertical Analysis		2014			2013			2012
Sales revenue		100	%		100	%		100	%
Cost of goods sold		62.6			64.0			66.8
Expenses		24.1			27.1			29.7

Calculate Capuano's net income as a percent of sales.

Brief Exercise 4: (Part Level Submission)

The following data are taken from the financial statements of Filbert Company.

		2014		2013
Accounts receivable (net), end of year		$ 550,300		$ 602,600
Net sales on account		4,859,600		3,986,800
Terms for all sales are 1/10, n/45

Compute for each year the receivable turnover ratio. At the end of 2012, accounts receivable was $560,900. (Round answers to 1 decimal place, e.g. 12.5.)