Hello need help with this question Comparative statement data for Sarasota Corp.

Question

Hello need help with this question

Comparative statement data for Sarasota Corp. and Bridgeport Corp., two competitors, are presented below. All balance sheet data are as of December 31, 2014 Sarasota Corp. Bridgeport Corp 2014 2014 Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Current assets Plant assets (net) Current liabilities Long-term liabilities Net cash provided by operating activities Capital expenditures Dividends paid Weighted-average number of shares outstanding $450,000 225,000 130,000 6,000 15,000 180,000 600,000 75,000 190,000 46,000 20,000 $900,000 450,000 150,000 10,000 75,000 700,000 800,000 230,000 200,000 180,000 50,000 5,000 50,000 20,000

Explanation / Answer

a Sarasota corp. Bridgeport corp Net sales 450000 900000 Expenses: Cost of goods sold 225000 450000 Operating expenses 130000 150000 Interest expense 6000 10000 Income tax expense 15000 75000 Total Expenses 376000 685000 Net income 74000 215000 Earnings per share = Net income/Weighted average number of shares outstanding Sarasota corp. 3.7 =74000/20000 Bridgeport corp. 4.3 =215000/50000 b Working capital = Current assets-Current liabilities Sarasota corp. 105000 =180000-75000 Bridgeport corp. 470000 =700000-230000 Current ratio = Current assets/Current liabilities Sarasota corp. 2.4 =180000/75000 Bridgeport corp. 3.0 =700000/230000 c Debt to assets = Total liabilities/Total assets Sarasota corp. 34.0% =(75000+190000)/(180000+600000) Bridgeport corp. 28.7% =(230000+200000)/(700000+800000) Free cash flow = Net cash provided by operating activities-Capital expenditures-Dividends paid Sarasota corp. 26000 =46000-20000 Bridgeport corp. 125000 =180000-50000-5000

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