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Balance Sheet
December 31, 2017
Assets
Current assets
Cash 60,100
Debt investments 84,000
Accounts receivable (net) 169,800
Inventory 145,000
Total current assets 458,900
Plant assets (net) 575,300
Total assets 1,034,200
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable 160,000
Income taxes payable 35,500
Total current liabilities 195,500
Bonds payable 200,000
Total liabilities 395,500
Stockholders’ equity
Common stock 350,000
Retained earnings 288,700
Total stockholders’ equity 638,700
Total liabilities and stockholders’ equity $1,034,200
Income Statement
For the Year Ended December 31, 2017
Net sales $2,218,500
Cost of goods sold 1,012,400
Selling and administrative expenses 906,000
Interest expense 78,000
Income tax expense 69,000
Net income $ 153,100
Answer:
(i) Working capital. $ 263,400
(ii) Current ratio 2.35
(iii) Free cash flow. $ 98,800
(iv) Debt to assets ratio. 38.2%
(v) Earnings per share. $ 3.062
Explanation:
(i) Working capital.
Current Assets - Current Liabilities:
458,900 - 195,500 = 263,400
(ii) Current ratio
Current Assets / Current Laibilities
458,900 / 195,500 = 2.35
(iii) Free cash flow.
cash from operations less cash used for capital expenditures
190,800 - 92,000 = 98,800
(iv) Debt to assets ratio.
Liaiblities / Assets
395,500 / 1,034,200 = 0.382421195
(v) Earnings per share.
net income / average shares outstanding
$ 153,100 / 50,000 = 3.062
