LUCILLE COMPANY

P13-2A
The comparative statements of Lucille Company are presented here.

LUCILLE COMPANY 
Income Statements 
For the Years Ended December 31 


Year
2012 
2011 

Net sales
$1,890,540 (2012 year)
$1,750,500 (2011 year)

Cost of goods sold
1,058,540 (2012 year)
1,006,000 (2011 year)

Gross profit
832,000 (2012 year)
744,500 (2011 year)

Selling and administrative expenses
500,000 (2012 year)
479,000 (2011 year)

Income from operations
332,000 (2012 year)
265,500 (2011 year)

Other expenses and losses Interest expense
22,000 (2012 year)
20,000 (2011 year)

Income before income taxes
310,000 (2012 year)
245,500 (2011 year)

Income tax expense
92,000 (2012 year) 
73,000 (2011 year)

Net income
$ 218,000 (2012 year)
$ 172,500 (2011 year)

Compute ratios from balance sheets and income statements.

(SO 6), AP

LUCILLE COMPANY 
Balance Sheets 
December 31

Assets for the years 2012 & 2011 

Current assets - - - - 

Cash
$ 60,100 (2012 year)
$ 64,200 (2011 year)

Short-term investments
74,000 (2012 year)
50,000 (2011 year)

Accounts receivable
117,800 (2012 year)
102,800 (2011 year)

Inventory
126,000 (2012 year)
115,500 (2011 year)

Total current assets
377,900 (2012 year)
332,500 (2011 year)

Plant assets (net)
649,000 (2012 year)
520,300 (2011 year)

Total assets
$1,026,900 (2012 year)
$852,800 (2011 year)


Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable
$ 160,000 (2012 year)
$145,400 (2011 year)

Income taxes payable
43,500 (2012 year)
42,000 (2011 year)

Total current liabilities
203,500 (2012 year)
187,400 (2011 year)

Bonds payable
220,000 (2012 year)
200,000 (2011 year)

Total liabilities
423,500 (2012 year)
387,400 (2011 year)


Stockholders’ equity

Common stock ($5 par)
290,000 (2012 year)
300,000 (2011 year)

Retained earnings
313,400 (2012 year)
165,400 (2011 year)

Total stockholders’ equity
603,400 (2012 year)
465,400 (2011 year)

Total liabilities and stockholders’ equity
$1,026,900 (2012 year)
$852,800 (2011 year)

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.

Instructions

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
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. 
N. Free cash flow.