Changes in various ratios: presented below is selected information from Brimmerer Company:

P13-5A – P646

Changes in various ratios: presented below is selected information from Brimmerer Company:

2013                       2012

sales revenue                                                    $910,000              $840,000

cost of goods sold                                            $575,000              $542,000

interest expense                                             $20,000 $20,000

income tax expense                                       $27,000 $24,000

net income                                                         $61,000 $52,000

cash flow from operating activities           $65,000 $55,000

capital expenditures                                       $42,000 $45,000

Accounts Receivable (net), Dec 31           $126,000              $120,000

inventory December 31                                                $196,000              $160,000

stockholders equity December 31            $450,000              $400,000

total assets December 31                             $730,000              $660,000

 

Required

  1. calculate the following ratios for 2013. The 2012 results are given for comparative purposes.
  2. Comment on the changes between the two years

2012

  1. Gross profit percentage                                                                 5%
  2. return on assets                                                                 3%
  3. return on sales                                                                 2%
  4. return on common stockholders equity (no preferred stock was outstanding) 9%
  5. accounts receivable turnover 8%
  6. average collection. 6 days
  7. inventory turnover 61
  8. Times interest earned ratio 8
  9. operating cash flow to capital expenditures ratio 22

 

 

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