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max2010maxim [7]

3 years ago

11

Additional information: The net cash provided by operating activities for 2017 was $190,800. The cash used for capital expenditu

res 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)

1 answer:

Studentka2010 [4]3 years ago

7 0

-- 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:

<u><em> (i) Working capital.</em></u><em> </em> $ 263,400

<u><em> (ii) Current ratio</em></u><em> </em> 2.35

<u><em> (iii) Free cash flow</em></u><em>. $ </em>98,800

<em><u> (iv) Debt to assets ratio.</u></em><em> 38.2%</em>

<u><em> (v) Earnings per share. </em></u><em> $ </em>3.062

Explanation:

<u><em> (i) Working capital.</em></u>

Current Assets - Current Liabilities:

458,900 - 195,500 = 263,400

<u><em> (ii) Current ratio</em></u>

Current Assets / Current Laibilities

458,900 / 195,500 = 2.35

<u><em> (iii) Free cash flow. </em></u>

cash from operations less cash used for capital expenditures

190,800 - 92,000 = 98,800

<em><u> (iv) Debt to assets ratio.</u></em>

Liaiblities / Assets

395,500 / 1,034,200 = 0.382421195

<u><em> (v) Earnings per share.</em></u>

net income / average shares outstanding

$ 153,100 / 50,000 = 3.062

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