MBA560 Financial and Managerial Accounting: P9-23 Use the financial statements for Bernard Company

MBA560 Financial and Managerial Accounting

Problem 9-23 Ratio analysis
Use the financial statements for Bernard Company from Problem 9-22 to calculate the following for 2012 and 2011. B
ernard Company Balance Sheets As of December 31 2012 2011 Assets Current assets Cash 16,000 12,000 Marketable securities 20,000 6,000 Accounts receivable (net) 54,000 46,000 Inventories 135,000 143,000 Prepaid items 25,000 10,000 Total current assets 250,000 217,000 Investments 27,000 20,000 Plant (net) 270,000 255,000 Land 29,000 24,000 Total assets $576,000 $516,000 Liabilities and Stockholders Equity Liabilities Current Liabilities Notes payable 17,000 6,000 Accounts payable 113,800 100,000 Salaries payable 21,000 15,000 Total current liabilities 151,800 121,000 Noncurrent liabilities Bonds payable 100,000 100,000 Other 32,000 27,000 Total noncurrent liabilities 132,000 127,000 Total liabilities 283,800 248,000 Stockholders' equity Preferred stock, par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued 80,000 80,000 Common stock, no par; 50,000 shares authorized; 10,000 shares issued 80,000 80,000 Retained earnings 132,200 108,000 Total stockholders' equity 292,200 268,000 Total liabilities and stockholders' equity $576,000 $516,000 Bernard Company Statement of Income and Retained Earnings For the Years Ended December 31 2012 2011 Revenues Sales (net) 230,000 210,000 Other revenues 8,000 5,000 Total revenues 238,000 215,000 Expenses Cost of goods sold 120,000 103,000 Selling, general, and administrative expenses 55,000 50,000 Interest expense 8,000 7,200 Income tax expense 23,000 22,000 Total expenses 206,000 182,200 Net earnings (net income) 32,000 32,800 Retained earnings, January 1 108,000 83,000 Less: Preferred stock dividends 2,800 2,800 Common stock dividends 5,000 5,000 Retained earnings, December 31 $132,200 $108,000

Required:
a. Working capital
b. Current Ratio
c. Quick Ratio
d. Accounts receivable turnover (beginning receivables at 01/01/2011, was $47,000)
e. Average number of days to collect accounts receivable
f. Inventory turnover (beginning inventory at 01/01/2011, was $140,000)
g. Average number of days to sell inventory
h. Debt to asset ratio
i. Debt to equity ratio
j. Times interest earned
k. Plant assets to long-term debt
l. Net margin
m. Asset turnover
n. Return on investment (ROI)
o. Return on Equity (ROE)
p. Earnings per share q. Book value per share of common stock
r. Price-earnings ratio (market price per share: 2011, $11.75; 2012, $12.50)
s. Dividend yield on common stock
Powered by