Condensed statement of financial position and income statement data for Golden L

Question

Condensed statement of financial position and income statement data for Golden Ltd. ar GOLDEN LTD Statement of Financial Position 2018 2017 2016 Assets Current assets Cash $29$81 $202 502 498 2,125 1,590 1,202 4,124 3,762 3,148 $6,249 $5,352 $4,350 Accounts receivable 898 703 1,198 806 Total current assets Property, plant, and equipment (net) Total assets Liabilities and Shareholders' Equity Liabilities $597 $547 $503 3,074 2,298 1,508 3,671 2,845 2,011 Current liabilities Non-current liabilities Total liabilities Shareholders' equity Common shares Retained earnings 997 997 997 1,581 ,510 1,342 2,578 2,507 2,339 49 $5,352 $4,350 Total shareholders' equity Total liabilities and shareholders' equity $,2 GOLDEN LTD. Income Statement Year Ended December 31 Sales (all on credit) Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income 2018 2017 2016 $4,524 $3,967 $3,568 2,481 2,091 1,795 2,043 1,876 1,773 1,4441,482 1,492 281 70 211 53 $306 $199 $158 500 599 394 129 265 191 102

Explanation / Answer

Answer of Part 1:

For 2016:

a. Average Accounts Receivable = (Begjnning Balance + Ending Accounts Receivable) /2
   Average Accounts Receivable = ($502 + $502) /2
   Average Accounts Receivable =$ 502

   Receivables Turnover = Sales / Average Accounts Receivable
   Receivable Turnover = $3,568 / $502
   Receivable Turnover = 7.1 times

b. Average Inventory = (Beginning Inventory + Ending Inventory) /2
    Average Inventory = ($498 + $498) /2
    Average Inventory = $498

   Inventory Turnover = Cost of Goods Sold / Average Inventory
   Inventory Turnover = $1,795 / $498
   Inventory Turnover = 3.6 times

c. Current Ratio = Current Assets / Current Liabilities
    Current Ratio = $1,202 / $503
    Current Ratio = 2.3:1

For 2017

a. Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) /2
   Average Accounts Receivable = ($502 + $703) /2
   Average Accounts Receivable =$ 603

   Receivables Turnover = Sales / Average Accounts Receivable
   Receivable Turnover = $3,967 / $603
   Receivable Turnover = 6.6 times

b. Average Inventory = (Beginning Inventory + Ending Inventory) /2
    Average Inventory = ($498 + $806) /2
    Average Inventory = $652

   Inventory Turnover = Cost of Goods Sold / Average Inventory
   Inventory Turnover = $2,091 / $652
   Inventory Turnover = 3.2 times

c. Current Ratio = Current Assets / Current Liabilities
    Current Ratio = $1,590 / $547
    Current Ratio = 2.9:1

For 2018

a. Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) /2
   Average Accounts Receivable = ($703 + $898) /2
   Average Accounts Receivable =$ 801

   Receivables Turnover = Sales / Average Accounts Receivable
   Receivable Turnover = $4,524 / $801
   Receivable Turnover = 5.6 times

b. Average Inventory = (Beginning Inventory + Ending Inventory) /2
    Average Inventory = ($806 + $1,198) /2
    Average Inventory = $1,002

   Inventory Turnover = Cost of Goods Sold / Average Inventory
   Inventory Turnover = $2,481 / $1,002
   Inventory Turnover = 2.5 times

c. Current Ratio = Current Assets / Current Liabilities
    Current Ratio = $2,125 / $597
    Current Ratio = 3.6:1

Answer of Part 2:

For 2016:

Gross Profit Margin = Gross Profit / Sales *100
|Gross Profit Margin = $1,773 / $3,568 *100
Gross Profit Margin =49.7%

For 2017:

Gross Profit Margin = Gross Profit / Sales *100
Gross Profit Margin = $1,876 / $3,967 *100
Gross Profit Margin = 47.3%

For 2018:

Gross Profit Margin = Gross Profit / Sales *100
Gross Profit Margin = $2,043 / $4,524 *100
Gross Profit Margin = 45.2%

Answer of Part 3:

For 2016:

Profit Margin Ratio = Net Income / Sales *100
Profit Margin Ratio = $158 / $3,568 *100
Profit Margin Ratio = 4.4%

For 2017:

Profit Margin Ratio = Net Income / Sales *100
Profit Margin Ratio = $199 / $3,967 *100
Profit Margin Ratio = 5.0%

For 2018:

Profit Margin Ratio = Net Income / Sales *100
Profit Margin Ratio = $306 / $4,524 *100
Profit Margin Ratio = 6.8%

Answer of Part 4:

For 2016:

Debt to Total Assets = Total Liabilities / Total Assets
Debt to Total Assets = $2,011 / $4,350
Debt to Total Assets = 46.2%

Times Interest Earned = Income from Operation / Interest
Times Interest Earned = $281 / $70
Times Interest Earned = 4.0times

For 2017:

Debt to Total Assets = Total Liabilities / Total Assets
Debt to Total Assets = $2,845 / $5,352
Debt to Total Assets = 53.2%

Times Interest Earned = Income from Operation / Interest
Times Interest Earned = $394 / $129
Times Interest Earned = 3.1 times

For 2018:

Debt to Total Assets = Total Liabilities / Total Assets
Debt to Total Assets = $3,671 / $6,249
Debt to Total Assets = 58.7%

Times Interest Earned = Income from Operation / Interest
Times Interest Earned = $599 / $191
Times Interest Earned = 3.1 times

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