P2-6A: Sievert Corporation

 

Condensed balance sheet and income statement data for Sievert Corporation are presented here and on the next page.

 

SIEVERT CORPORATION

 

Balance Sheets

 

31-Dec

 

2012 2011

 

Assets

 

Cash 28,000 20,000

 

Receivables (net) 70,000 62,000

 

Other current assets 90,000 73,000

 

Long-term investments 62,000 60,000

 

Plant and equipment (net) 510,000 470,000

 

Total assets 760,000 685,000

 

Liabilities and Stockholders Equity

 

Current liabilities 75,000 70,000

 

Long-term debt 80,000 90,000

 

Common stock 330,000 300,000

 

Retained earnings 275,000 225,000

 

Total liabilities and stockholders equity 760,000 685,000

 

SIEVERT CORPORATION

 

Income Statements

 

For the Years Ended December 31

 

 

 

2012 2011

 

Sales 750,000 680,000

 

Cost of goods sold 440,000 400,000

 

Operating expenses (including income taxes) 240,000 220,000

 

Net income 70,000 60,000

 

Additional information:

 

Cash from operating activities 82,000 56,000

 

Cash used for capital expenditures 45,000 38,000

 

Dividends paid 20,000 15,000

 

Average number of shares outstanding 33,000 30,000

 

Instructions

 

Compute these values and ratios for 2011 and 2012.

 

(a) Earnings per share.

 

(b) Working capital.

 

(c) Current ratio.

 

(d) Debt to total assets ratio.

 

(e) Free cash flow.

 

(f ) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2011 to 2012 of Sievert Corporation

 

 

 

P13-2A : Lucille Company

 

The comparative statements of Lucille Company are presented here.

 

LUCILLE COMPANY

 

Income Statements

 

For the Years Ended December 31

 

 

 

2012 2011

 

Net sales 1,890,540 1,750,500

 

Cost of goods sold 1,058,540 1,006,000

 

Gross profit 832,000 744,500

 

Selling and administrative expenses 500,000 479,000

 

Income from operations 332,000 265,500

 

Other expenses and losses

 

Interest expense 22,000 20,000

 

Income before income taxes 310,000 245,500

 

Income tax expense 92,000 73,000

 

Net income 218,000 172,500

 

LUCILLE COMPANY

 

Balance Sheets

 

31-Dec

 

 

 

2012 2011

 

Assets

 

Current assets

 

Cash 60,100 64,200

 

Short-term investments 74,000 50,000

 

Accounts receivable 117,800 102,800

 

Inventory 126,000 115,500

 

Total current assets 377,900 332,500

 

Plant assets (net) 649,000 520,300

 

Total assets 1,026,900 852,800

 

Liabilities and Stockholders Equity

 

Current liabilities

 

Accounts payable 160,000 145,400

 

Income taxes payable 43,500 42,000

 

Total current liabilities 203,500 187,400

 

Bonds payable 220,000 200,000

 

Total liabilities 423,500 387,400

 

Stockholders equity

 

Common stock ($5 par) 290,000 300,000

 

Retained earnings 313,400 165,400

 

Total stockholders equity 603,400 465,400

 

Total liabilities and stockholders equity 1,026,900 852,800

 

All sales were on account. Net cash provided by operating activities for 2012 was $220,000.

 

Capital expenditures were $136,000, and cash dividends were $70,000.

 

Instruction:

 

Compute the following ratios for 2012.

 

(a) Earnings per share.

 

(b) Return on common stockholders equity.

 

(c) Return on assets.

 

(d) Current ratio.

 

(e) Receivables turnover.

 

(f ) Average collection period.

 

(g) Inventory turnover. (n) Free cash flow.

 

(h) Days in inventory.

 

(i) Times interest earned.

 

(j) Asset turnover.

 

(k) Debt to total assets.

 

(l) Current cash debt coverage.

 

(m) Cash debt coverage.

 

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