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P2-6A: Sievert Corporation
Condensed balance sheet and income statement data for Sievert Corporation are presented here and on the next page.
SIEVERT CORPORATION
Balance Sheets
31-Dec
2012 2011
Assets
Cash 28,000 20,000
Receivables (net) 70,000 62,000
Other current assets 90,000 73,000
Long-term investments 62,000 60,000
Plant and equipment (net) 510,000 470,000
Total assets 760,000 685,000
Liabilities and Stockholders’ Equity
Current liabilities 75,000 70,000
Long-term debt 80,000 90,000
Common stock 330,000 300,000
Retained earnings 275,000 225,000
Total liabilities and stockholders’ equity 760,000 685,000
SIEVERT CORPORATION
Income Statements
For the Years Ended December 31
2012 2011
Sales 750,000 680,000
Cost of goods sold 440,000 400,000
Operating expenses (including income taxes) 240,000 220,000
Net income 70,000 60,000
Additional information:
Cash from operating activities 82,000 56,000
Cash used for capital expenditures 45,000 38,000
Dividends paid 20,000 15,000
Average number of shares outstanding 33,000 30,000
Instructions
Compute these values and ratios for 2011 and 2012.
(a) Earnings per share.
(b) Working capital.
(c) Current ratio.
(d) Debt to total assets ratio.
(e) Free cash flow.
(f ) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2011 to 2012 of Sievert Corporation
P13-2A : Lucille Company
The comparative statements of Lucille Company are presented here.
LUCILLE COMPANY
Income Statements For the Years Ended December 31 2012 2011
Net sales 1,890,540 1,750,500
Cost of goods sold 1,058,540 1,006,000
Gross profit 832,000 744,500
Selling and administrative expenses 500,000 479,000
Income from operations 332,000 265,500
Other expenses and losses
Interest expense 22,000 20,000
Income before income taxes 310,000 245,500
Income tax expense 92,000 73,000
Net income 218,000 172,500
LUCILLE COMPANY Balance Sheets 31-Dec
2012 2011
Assets
Current assets
Cash 60,100 64,200
Short-term investments 74,000 50,000
Accounts receivable 117,800 102,800
Inventory 126,000 115,500
Total current assets 377,900 332,500
Plant assets (net) 649,000 520,300
Total assets 1,026,900 852,800
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable 160,000 145,400
Income taxes payable 43,500 42,000
Total current liabilities 203,500 187,400
Bonds payable 220,000 200,000
Total liabilities 423,500 387,400
Stockholders’ equity
Common stock ($5 par) 290,000 300,000
Retained earnings 313,400 165,400
Total stockholders’ equity 603,400 465,400
Total liabilities and stockholders’ equity 1,026,900 852,800
All sales were on account. Net cash provided by operating activities for 2012 was $220,000.
Capital expenditures were $136,000, and cash dividends were $70,000.
Instruction:
Compute the following ratios for 2012.
(a) Earnings per share.
(b) Return on common stockholders’ equity.
(c) Return on assets.
(d) Current ratio.
(e) Receivables turnover.
(f ) Average collection period.
(g) Inventory turnover. (n) Free cash flow.
(h) Days in inventory.
(i) Times interest earned.
(j) Asset turnover.
(k) Debt to total assets.
(l) Current cash debt coverage.
(m) Cash debt coverage.
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