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Exercise 13-13

The condensed financial statements of Elliott Company for the years 2013 and 2014 are presented below.

ELLIOTT COMPANY Balance Sheets December 31 (in thousands)
	2014	2013
Current assets
Cash and cash equivalents	$330	$360
Accounts receivable (net)	506	436
Inventory	519	449
Prepaid expenses	130	160
Total current assets	1,485	1,405
Property, plant, and equipment (net)	410	380
Investments	46	46
Intangibles and other assets	530	510
Total assets	$2,471	$2,341
Current liabilities	$856	$826
Long-term liabilities	539	439
Stockholders’ equity—common	1,076	1,076
Total liabilities and stockholders’ equity	$2,471	$2,341

ELLIOTT COMPANY Income Statements For the Year Ended December 31 (in thousands)
	2014	2013
Sales revenue	$3,859	$3,519
Costs and expenses
Cost of goods sold	1,006	926
Selling & administrative expenses	2,400	2,330
Interest expense	10	20
Total costs and expenses	3,416	3,276
Income before income taxes	443	243
Income tax expense	177	97
Net income	$ 266	$ 146

Compute the following ratios for 2014 and 2013. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%.)

(a)		Current ratio.
(b)		Inventory turnover. (Inventory on December 31, 2012, was $430.)
(c)		Profit margin.
(d)		Return on assets. (Assets on December 31, 2012, were $2,790.)
(e)		Return on common stockholders’ equity. (Equity on December 31, 2012, was $970.)
(f)		Debt to assets ratio.
(g)		Times interest earned.

		2014		2013
Current ratio.			:1		:1
Inventory turnover.
Profit margin.			%		%
Return on assets.			%		%
Return on common stockholders’ equity.			%		%
Debt to assets ratio.			%		%
Times interest earned.			times		times
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Exercise 13-9

Kinder Company has these comparative balance sheet data:

KINDER COMPANY Balance Sheets December 31
	2014	2013
Cash	$ 36,210	$ 72,420
Accounts receivable (net)	168,980	144,840
Inventory	144,840	120,700
Plant assets (net)	482,800	434,520
	$832,830	$772,480
Accounts payable	$ 120,700	$ 144,840
Mortgage payable (15%)	241,400	241,400
Common stock, $10 par	337,960	289,680
Retained earnings	132,770	96,560
	$832,830	$772,480

Additional information for 2014:

1.		Net income was $32,000.
2.		Sales on account were $386,100. Sales returns and allowances amounted to $28,100.
3.		Cost of goods sold was $228,200.
4.		Net cash provided by operating activities was $57,600.
5.		Capital expenditures were $28,600, and cash dividends were $20,900.

Compute the following ratios at December 31, 2014. (Round all answers to 2 decimal places, e.g. 1.83.)

(a)		Current ratio.		:1
(b)		Accounts receivable turnover.		times
(c)		Average collection period.		days
(d)		Inventory turnover.		times
(e)		Days in inventory.		days
(f)		Cash debt coverage ratio.		times
(g)		Current cash debt coverage ratio.		times
(h)		Free cash flow.	$
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