Problem - The condensed financial statements of Sandhill Co. for the years 2016 and 2017 are presented as follows. (Amounts in thousands.)
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SANDHILL CO. Balance Sheets December 31
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2017
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2016
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Current assets
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Cash and cash equivalents
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$330
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$360
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Accounts receivable (net)
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500
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430
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Inventory
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660
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590
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Prepaid expenses
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120
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160
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Total current assets
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1,610
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1,540
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Investments
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40
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40
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Property, plant, and equipment (net)
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420
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380
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Intangibles and other assets
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530
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510
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Total assets
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$2,600
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$2,470
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Current liabilities
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$930
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$820
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Long-term liabilities
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610
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580
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Stockholders' equity-common
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1,060
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1,070
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Total liabilities and stockholders' equity
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$2,600
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$2,470
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SANDHILL CO. Income Statements For the Year Ended December 31
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2017
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2016
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Sales revenue
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$4,000
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$3,660
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Costs and expenses
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Cost of goods sold
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985
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920
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Selling & administrative expenses
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2,400
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2,330
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Interest expense
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25
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20
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Total costs and expenses
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3,410
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3,270
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Income before income taxes
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590
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390
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Income tax expense
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177
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117
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Net income
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$ 413
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$ 273
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Compute the following ratios for 2017 and 2016.
(a) Current ratio.
(b) Inventory turnover. (Inventory on 12/31/15, was $440.)
(c) Profit margin.
(d) Return on assets. (Assets on 12/31/15, were $2,670.)
(e) Return on common stockholders' equity. (Stockholders' equity on 12/31/15, was $990.)
(f) Debt to assets ratio.
(g) Times interest earned.