Financial Accounting: P2-5A Here and on page 85 are financial statements of Batcha Company

Financial Accounting

P2-5A
Here and on page 85 are financial statements of Batcha Company.
BATCHA COMPANY
Income Statement
For the year ended December 31, 2012
Net sales 2,218,500
Cost of goods sold 1,012,400
Selling and administrative expenses 906,000
Interest expense 78,000
Income tax expense 69,000
Net income 153,100

BATCHA COMPANY
Balance Sheet
'December 31, 2012
Assets
Current assets
Cash 60,100
Short term investments 84,000
Accounts receivable (net) 169,800
Inventory 145,000
Total current assets 458,900
Plant assets (net) 575,300
Total assets 1,034,200

Liabilities and stockholder's equity
Current liabilities
Accounts payable 160,000
Income taxes payable 35,500
Total current liabilities 195,500
Bonds payable 200,000
Total liabilities 395,500
Stockholders' equity
Common stock 350,000
Retained earnings 288,700
Total stockholders' equity 638,700
Total liabilitities and stockholders' equity 1,034,200

Additional information: The cash provided by operating activities for 2012 was $190,800. The cash used for capital expenditures was $92,00. The cash used for dividends, was $31,000. The average number of shares outstanding during the year was 50,000.
Instructions:
A. Compute the following values and ratios for 2012. (We provide the results from 2011 for comparative purpose)
i Working capital. (2011: $160,500)
ii Current ratio (2011: 1.65:1)
iii. Free cash flow (2011: $48,700)
iv Debt to total assets ratio (2011: 31%)
v. Earnings per share (2011: $3.15)
B. Using your calculations from part A, discuss changes from 2011 in liquidity, solvency, and profitability.
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