Year 1 Year 2 Year 3 Year 4 Year 5

Sales $ 4,604,460.00 $ 4,867,440.00 $ 5,006,540.00 $ 5,523,530.00 $ 5,776,690.00

Current assets
Cash $ 97,844.00 $ 96,778.00 $ 90,758.00 $ 89,701.00 $ 67,906.00
Accounts receivable, net $ 419,278.00 $ 435,825.00 $ 442,964.00 $ 501,917.00 $ 574,469.00
Inventory $ 802,064.00 $ 872,733.00 $ 834,578.00 $ 895,804.00 $ 911,713.00
Total current assets $ 1,319,186.00 $ 1,405,336.00 $ 1,368,300.00 $ 1,487,422.00 $ 1,554,088.00
Current liabilities $ 306,413.00 $ 330,141.00 $ 332,005.00 $ 328,884.00 $ 406,137.00

Solution

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 100.0% 105.7% 108.7% 120.0% 125.5%
Current assets
Cash 100.0% 98.9% 92.8% 91.7% 69.4%
Accounts receivable, net 100.0% 103.9% 105.6% 119.7% 137.0%
Inventory 100.0% 108.8% 104.1% 111.7% 113.7%
Total current assets 100.0% 106.5% 103.7% 112.8% 117.8%
Current liabilities 100.0% 107.7% 108.4% 107.3% 132.5%
 This Year Last year
Sales $ 7,350,000.00 $ 5,586,000.00
Cost of goods sold $ 4,620,000.00 $ 3,509,000.00
Gross Margin $ 2,730,000.00 $ 2,077,000.00
Selling and administrative expenses
Selling expenses $ 1,377,000.00 $ 1,074,000.00
Administrative expenses $ 710,500.00 $ 613,000.00
Total expenses $ 2,087,500.00 $ 1,687,000.00
Net operating income $ 642,500.00 $ 390,000.00
Interest expense $ 99,000.00 $ 86,000.00
Net income before taxes $ 543,500.00 $ 304,000.00

Solution

This Year Last year

Sales 100.0% 100.0%
Cost of goods sold 62.9% 62.8%
Gross Margin 37.1% 37.2%
Selling and administrative expenses
Selling expenses 18.7% 19.2%
Administrative expenses 9.7% 11.0%
Total expenses 28.4% 30.2%
Net operating income 8.7% 7.0%
Interest expense 1.3% 1.5%
Net income before taxes 7.4% 5.4%
Requirement 1

Total current assets $ 24,910.00

Total current liabilities $ 19,880.00

Working capital Total current assets - Total current liabilities $ 5,030.00

Requirement 2

Total current assets $ 24,910.00

Total current liabilities $ 19,880.00

Current ratio Total current assets / Total current liabilities 1.25

Requirement 3

Total current assets $ 24,910.00

Less: Inventories $ 12,300.00
Less: Prepaid expenses $ 700.00
Quick assets $ 11,910.00

Total current liabilities $ 19,880.00

Acid test ratio 0.60

Requirement 1

Accounts receivable for this year $ 9,400

Accounts receivable for last year $ 7,200
Average accounts receivables $ 8,300

Sales $ 73,040

Accounts receivable turnover Sales/Average accounts receivables 8.80

Requirement 2

Average collection period 365 days/Accounts receivable turnover 41.48

Requirement 3

Inventory for this year $ 13,800

Inventory for last year $ 11,800
Average inventory $ 12,800

Cost of goods sold $ 39,680

Inventory turnover Cost of goods sold/Average inventory 3.10

Requirement 4

Average sale period 365 days/Inventory turnover 117.74

Requirement 5

Average collection period 41.48

Average sale period 117.74
Operating cycle Average collection period + Average sale period 159.22

Requirement 6

Total asset for this year $ 80,904

Total assets for last year $ 72,054
Average total assets $ 76,479

Sales $ 73,040

Total assets turnover Sales/Average total assets 0.96

times

days

times

days

days
days
days

times
Requirement 1

Net operating income (EBIT) $ 19,800

Interest expense $ 860

Times Interest Earned ratio Net operating income/Interest expense 23.0 times

Requirement 2

Total liabilities $ 28,470

Total stockholders' equity $ 54,163

Debt-to-Equity ratio Total liabilities / Total stockholders' equity 0.53

Requirement 3

Total assets $ 82,633

Total stockholders' equity $ 54,163

Equity Multiplier Total assets/Total stockholders' equity 1.53

Requirement 1

Gross Margin $ 29,500

Sales $ 84,000

Gross margin percentage Gross margin/Sales 35.12%

Requirement 2

Net income $ 4,440

Sales $ 84,000

Net profit margin percentage Net income / Sales 5.29%

Requirement 3

Total asset for this year $ 52,610

Total assets for last year $ 47,310
Average total assets $ 49,960

Net income $ 4,440

Return on assets Net income/Average total assets 8.89%

Requirement 4

Total stockholders' equity for this year 36560

Total stockholders' equity for last year 32460
Average stockholders' equity $ 34,510

Net income $ 4,440

Return on assets Net income/Average stockholders' equ 12.87%

Requirement 1

Net income
Number of common stock shares outstanding

Earnings per share

Requirement 2

Price per share

Earnings per share

Price-Earnings ratio

Requirement 3

Dividend per share

Earnings per share

Dividend payout ratio

Requirement 4

Dividend per share

Price per share

Dividend yield ratio

Requirement 5

Total stockholders' equity

Number of shares outstanding

Book value per share

 $ 3,630 (thousands)
810,000

Net income/Number of common stock shares outstanding $ 4.48

$ 18.50
$ 4.48

Price per share/Earnings per share 4.13

$ 0.40
$ 4.48

Dividend per share/Earnings per share 8.93%

$ 0.40
$ 18.50

Dividend per share/Price per share 2.16%

$ 35,126.00 thousands
810,000

Total stockholders' equity/Number of shares outstanding $ 43.37