Comparative Statements of Income & Balance Sheets For Becks Construction Company
ID: 2481654 • Letter: C
Question
Comparative Statements of Income & Balance Sheets For Becks Construction Company of Prescott are as follows: Becks Construction Company, Inc. Consolidated Statements of Income For the Last Four Fiscal Years of Operations (000’s $)
Becks Construction Company, Inc. Consolidated Statements of Income For the Last Four Fiscal Years of Operations (000’s $)
20x3 20x2 20x1 20x0
Net Sales $860 $770 $740 $680
Cost of Sales 380 350 340 310
Gross Profit 480 420 400 370
Selling, G&A Expenses 230 210 210 200
Operating Profit 250 210 190 170
Interest Expense 15 10 10 5
Income Before Taxes 235 200 180 165
Provision for Taxes 85 70 60 55
Net Income $150 $130 $120 $110
Requirements: Based upon the Income Statement and Balance Sheet data, complete the requested liquidity, solvency and profitability ratios, as requested on the following pages.
Becks Construction Company, Inc. Consolidated Balance Sheets For the Last Four Fiscal Years of Operations (000’s $)
Liabilities & Equity
Current Liabilities
Accounts Payable $ 140 $ 130 $ 105 $ 95
Accrued Liabilities 110 105 85 75
Current Portion L-T-Debt 30 25 20 20
Total Current Liabilities 280 260 210 190
Long-Term Liabilities
Long-Term Debt 195 165 140 110
Accrued Employee Benefits 65 55 50 40
Total Long-Term Liabilities 260 220 190 150
Total Liabilities 540 480 400 340
Stockholders’ Equity
Common Stock, $0.10 Par Val 160 160 160 160
Capital in Excess of Par 70 70 70 70
Retained Earnings _ 750 600 470 350
Total Stockholders’ Equity 980 830 700 580
20x3 20x2 20x1 20x0
Assets
Current Assets
Cash & Cash Equivalents $ 145 $ 135 $ 135 $ 125
Accounts Receivable, Net 160 150 150 140
Inventories 60 40 40 30
Prepaid Expense 115 115 105 105
Total Current Assets 480 440 430 400
Property, Plant & Equipment
Land 110 110 110 110
Gross P. P. & E. 1,410 1,180 920 710
Less: Accum Depreciation 370 310 250 190
Net Property, Plant & Equip 1,040 870 670 520
Total Assets $ 1,520 $ 1,310 $ 1,100 $ 920
Total Liabilities & Equity $ 1,520 $ 1,310 $ 1,100 $ 920
Becks Construction Company, Inc. – Requested Ratios
20x3 20x2 20x1
Liquidity Ratios:
Current Ratio __________ __________ __________
Acid-Test Ratio __________ __________ __________
Accounts Rec Turnover Ratio __________ __________ __________
Inventory Turnover Ratio __________ __________ __________
Days’ Sales Uncollected __________ __________ __________
Days’ Sales in Inventory __________ __________ __________
Cash-to-Cash Operating Cycle __________ __________ __________
Note: Use the Alternate Equations Presented in the PowerPoints for Days’ Sales Uncollected, Days’ Sales in Inventory, and Cash-to-Cash Operating Cycle
Total Asset Turnover __________ __________ __________
Solvency Ratios:
Debt Ratio __________ __________ __________
Equity Ratio __________ __________ __________
Debt-to-Equity Ratio __________ __________ __________
Times Interest Earned Ratio __________ __________ __________
Profitability Ratios:
Gross Margin Ratio __________ __________ __________
Operating Income Margin Ratio __________ __________ __________
Profit Margin Ratio __________ __________ __________
Note: Use the Equation Presented in the PowerPoints for the Operating Income Margin Ratio
Return on Total Assets __________ __________ __________
Return on Equity __________ __________ __________
Explanation / Answer
LR-
*
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Ratios Formulas Calculation Net Result 2003Current Ratio Current Assets/Current Liabilities 480 / 280 1.71 2002 Current Ratio Current Assets/Current Liabilities 440 / 260 1.69 2001Current Ratio Current Assets/Current Liabilities 430 / 210 2.05 2000 Current Ratio Current Assets/Current Liabilities 400 / 190 2.11 2003 Quick Ratio Liquid Assets/Current Liabilities 305 / 280 1.09 2002 Quick Ratio Liquid Assets/Current Liabilities 285 / 260 1.10 2001 Quick Ratio Liquid Assets/Current Liabilities 285 / 210 1.36 2000 Quick Ratio Liquid Assets/Current Liabilities 265 / 190 1.39
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