I am not able to identify the following questions, please see balance sheet on t
ID: 2498684 • Letter: I
Question
I am not able to identify the following questions, please see balance sheet on top image and questions in bottom image.
FRIZELL COMPANY Balance Sheets December 31 Assets Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land Building and equipment (net) Total assets Liabilities and Stockholders Equity Notes payable Accounts payable Accrued liabilities Bonds payable, due 2017 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity 2013 s 70,000 65,000 40,000 90,000 165,000 23,000 130,000 185,000 $874,000 $698,000 55,000 104,000 230,000 25,000 130,000 260,000 $170,000 $120,000 52,000 40,000 170,000 200,000 200,000 149,000116,000 $874,000 $698,000 65,000 40,000 250,000 FRIZELL COMPANY Income Statements For the Years Ended December 31 2014 2013 Sales revenue Cost of goods sold Gross profit Operating expenses Net income $882,000 640,000 242,000 190,000 $52,000 $790,000 575,000 215,000 167,000 $ 48,000Explanation / Answer
Return on common stockholders equity = Net income/ average common stockholder's equity
2014 = $52,000/ 332,500 = 15.64%
2015 = 54,000/ 466,000 = 11.59%
Debt to assets ratio = total liabilities / total assets
2014 = 525,000/ 874,000 = 60%
2015 = 355,000/1054,000 = 33.69%
Change = 26.31/60 = 43.87%
3) Price earning ratio = Market value per share/ Earnings per share
Earnings per share = 52,000/ 20,000 = $2.6
P/E ration = $9/2.6 = 3.46 times
2015 = 54,000/ 29,000
= 1.86
P/E ratio = $12/1.86
= 6.45 times
2014 2015 % change return on common stockholders's equity 15.64% 11.59% 25.90% Debts to assets ratio 60% 33.69% 43.87% Price earning ratio 3.46 times 1.86 times 6.45 timesRelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.