Financial statement analysis.
The condensed financial statements of Marks Company for the years 2012-2013 are presented below:
Marks Company
Comparative Balance Sheets
As of December 31, 2012 and 2013
2013
Cash $420,000
Receivables (net) 460,000
Inventories 380,000
Plant and equipment 1,700,000
Accumulated depreciation -260,000
$2,700,000
Accounts payable $340,000
Dividends payable -0-
Bonds payable 400,000
Common stock ($10 par) 1,520,000
Retained earnings 440,000
$2,700,000
Additional data:
Market value of stock at 12/31/13 is $80 per share.
Marks sold 32,000 shares of common stock at par on July 1, 2013.
Marks Company
Condensed Income Statement
For the Year Ended December 31, 2013
Sales
Cost of goods sold
Gross profit
Administrative and selling expenses
Net income
Instructions
Compute the following financial ratios
a. Current Asset/Current Liability Current ratio at 12/31/13
b. Acid-Test Ratio = (Current assets - Inventory) / Current Liabilities Acid test ratio at 12/31/13
c. Sales/Average Accounts Receivable Receivables turnover in 2013
d. Sales/Inventory Inventory turnover in 2013
e. Net Income/Sales Profit margin on sales in 2013
f. Net Income - Dividend on preferred stock/Average shares outstanding Earnings per share in 2013
g. Rate of return on common stock equity in 2013
h. Market Value per share/EPS Price earnings ratio at 12/31/13
i. Short-term + Long-Term Debt/Total Assets Debt to total assets at 12/31/13
j. Total Share Equity - Preferred Equity/Total Outstanding Shares Book value per share at 12/31/13