condensed financial statements of Vaughn Company for the years 2021 and 2022 are as follows. Vaughn Company Balance Sheets December 31 (in thousands) 2022 2021 Current assets Cash and cash equivalents $350 $350 Accounts receivable (net) 450 370 Inventory 470 420 Prepaid expenses 120 170 Total current assets 1,390 1,310 Property, plant, and equipment (net) 370 340 Investments 1 10 Other assets 490 470 Total assets $2,251 $2,130 Current liabilities $830 $730 Long-term liabilities 391 370 Stockholders’ equity—common 1,030 1,030 Total liabilities and stockholders’ equity $2,251 $2,130 Vaughn Company Income Statements For the Years Ended December 31 (in thousands) 2022 2021 Net sales $3,880 $3,530 Expenses Cost of goods sold 950 910 Selling and administrative expenses 2,420 2,340 Interest expense 10 20 Total expenses 3,380 3,270 Income before income taxes 500 260 Income tax expense 200 104 Net income $300 $156 Compute the following ratios for 2022 and 2021. Inventory on December 31, 2020, was $330. Assets on December 31, 2020, were $1,910. Stockholders’ equity—common on December 31, 2020, was $900. (Round current ratio and inventory turnover to 2 decimal places, e.g. 15.25. Round other answers to 1 decimal place, e.g. 15.2 or 15.2%.) 2022 2021 (a) Current ratio enter ratio rounded to 2 decimal places :1 enter ratio rounded to 2 decimal places :1 (b) Inventory turnover enter a number of times rounded to 2 decimal places times enter a number of times rounded to 2 decimal places times (c) Profit margin enter percentages rounded to 1 decimal place % enter percentages rounded to 1 decimal place
condensed financial statements of Vaughn Company for the years 2021 and 2022 are as follows. Vaughn Company Balance Sheets December 31 (in thousands) 2022 2021 Current assets Cash and cash equivalents $350 $350 Accounts receivable (net) 450 370 Inventory 470 420 Prepaid expenses 120 170 Total current assets 1,390 1,310 Property, plant, and equipment (net) 370 340 Investments 1 10 Other assets 490 470 Total assets $2,251 $2,130 Current liabilities $830 $730 Long-term liabilities 391 370 Stockholders’ equity—common 1,030 1,030 Total liabilities and stockholders’ equity $2,251 $2,130 Vaughn Company Income Statements For the Years Ended December 31 (in thousands) 2022 2021 Net sales $3,880 $3,530 Expenses Cost of goods sold 950 910 Selling and administrative expenses 2,420 2,340 Interest expense 10 20 Total expenses 3,380 3,270 Income before income taxes 500 260 Income tax expense 200 104 Net income $300 $156 Compute the following ratios for 2022 and 2021. Inventory on December 31, 2020, was $330. Assets on December 31, 2020, were $1,910. Stockholders’ equity—common on December 31, 2020, was $900. (Round current ratio and inventory turnover to 2 decimal places, e.g. 15.25. Round other answers to 1 decimal place, e.g. 15.2 or 15.2%.) 2022 2021 (a) Current ratio enter ratio rounded to 2 decimal places :1 enter ratio rounded to 2 decimal places :1 (b) Inventory turnover enter a number of times rounded to 2 decimal places times enter a number of times rounded to 2 decimal places times (c) Profit margin enter percentages rounded to 1 decimal place % enter percentages rounded to 1 decimal place
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The condensed financial statements of Vaughn Company for the years 2021 and 2022 are as follows.
|
Vaughn Company
Balance Sheets December 31 (in thousands) |
||||
|---|---|---|---|---|
|
2022
|
2021
|
|||
|
Current assets
|
||||
|
Cash and cash equivalents
|
$350 | $350 | ||
|
Accounts receivable (net)
|
450 | 370 | ||
|
Inventory
|
470 | 420 | ||
|
Prepaid expenses
|
120 | 170 | ||
|
Total current assets
|
1,390 | 1,310 | ||
|
Property, plant, and equipment (net)
|
370 | 340 | ||
|
Investments
|
1 | 10 | ||
|
Other assets
|
490 | 470 | ||
|
Total assets
|
$2,251 | $2,130 | ||
|
Current liabilities
|
$830 | $730 | ||
|
Long-term liabilities
|
391 | 370 | ||
|
|
1,030 | 1,030 | ||
|
Total liabilities and stockholders’ equity
|
$2,251 | $2,130 |
|
Vaughn Company
Income Statements For the Years Ended December 31 (in thousands) |
||||
|---|---|---|---|---|
|
2022
|
2021
|
|||
|
Net sales
|
$3,880 | $3,530 | ||
|
Expenses
|
||||
|
Cost of goods sold
|
950 | 910 | ||
|
Selling and administrative expenses
|
2,420 | 2,340 | ||
|
Interest expense
|
10 | 20 | ||
|
Total expenses
|
3,380 | 3,270 | ||
|
Income before income taxes
|
500 | 260 | ||
|
Income tax expense
|
200 | 104 | ||
|
Net income
|
$300 | $156 |
Compute the following ratios for 2022 and 2021. Inventory on December 31, 2020, was $330. Assets on December 31, 2020, were $1,910. Stockholders’ equity—common on December 31, 2020, was $900. (Round current ratio and inventory turnover to 2 decimal places, e.g. 15.25. Round other answers to 1 decimal place, e.g. 15.2 or 15.2%.)
|
2022
|
2021
|
|||||||
|---|---|---|---|---|---|---|---|---|
|
(a)
|
Current ratio
|
enter ratio rounded to 2 decimal places | :1 | enter ratio rounded to 2 decimal places | :1 | |||
|
(b)
|
Inventory turnover
|
enter a number of times rounded to 2 decimal places | times | enter a number of times rounded to 2 decimal places | times | |||
|
(c)
|
Profit margin
|
enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
|
(d)
|
|
enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
|
(e)
|
Return on common stockholders’ equity
|
enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
|
(f)
|
Debt to assets ratio
|
enter percentages rounded to 1 decimal place | % | enter percentages rounded to 1 decimal place | % | |||
|
(g)
|
Times interest earned
|
enter a number of times rounded to 1 decimal place | times | enter a number of times rounded to 1 decimal place | times |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Transcribed Image Text:Compute the following ratios for 2022 and 2021. Inventory on December 31, 2020, was $330. Assets on December 31, 2020, were
$1,910. Stockholders' equity-common on December 31, 2020, was $900. (Round current ratio and inventory turnover to 2 decimal place
e.g. 15.25. Round other answers to 1 decimal place, e.g. 15.2 or 15.2%.)
(a)
(b) Inventory turnover
(c)
(d)
(e)
(f)
Current ratio
(g)
Profit margin
Return on assets
Return on common stockholders' equity
Debt to assets ratio
Times interest earned
2022
1.67
2
7.73
:1
times
%
%
%
%
times
2021
1.79
2
4.42
:1
times
de
%
%
%
%
times
Solution
by Bartleby ExpertRecommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education