Question

Additional information: The net cash provided by operating activities for 2017 was $190,800. The cash used for capital expenditures was $92,000. The cash used for dividends was $31,000. The weighted-average number of shares outstanding during the year was 50,000. (a) Compute the following values and ratios for 2017. (We provide the results from 2016 for comparative purposes.) (Round Current Ratio and Earnings per share to 2 decimal places, e.g. 15.25 and Debt to assets ratio to 1 decimal place, e.g. 78.9%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (i) Working capital. (2016: $160,500) (ii) Current ratio. (2016: 1.65:1) (iii) Free cash flow. (2016: $48,700) (iv) Debt to assets ratio. (2016: 31%) (v) Earnings per share. (2016: $3.15)

Answer 1

-- missing information--

Balance Sheet

December 31, 2017

Assets  

Current assets  

 Cash                                  60,100

 Debt 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 Stockholders’ 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 liabilities and stockholders’ equity  $1,034,200

Income Statement

For the Year Ended December 31, 2017

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

Answer:

 (i) Working capital.     $  263,400

  (ii) Current ratio                 2.35

(iii) Free cash flow.         $  98,800

 (iv) Debt to assets ratio.   38.2%

(v) Earnings per share.     $ 3.062

Explanation:

 (i) Working capital.

Current Assets - Current Liabilities:

458,900 - 195,500 = 263,400

  (ii) Current ratio

Current Assets / Current Laibilities

  458,900 / 195,500 = 2.35

(iii) Free cash flow.

cash from operations less cash used for capital expenditures

190,800 - 92,000 = 98,800

 (iv) Debt to assets ratio.

 Liaiblities /    Assets

 395,500 /   1,034,200  = 0.382421195

(v) Earnings per share.

net income / average shares outstanding

$ 153,100 / 50,000 = 3.062