WAHLBERG COMPANY Income Statements For the Years Ended December 31 2019 2018 Net
ID: 2525544 • Letter: W
Question
WAHLBERG COMPANY Income Statements For the Years Ended December 31 2019 2018 Net sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Other expenses and losses $1,890,540$1,750,500 1,006,000 744,500 479,000 265,500 1,058,540 832,000 500,000 332,000 20,000 245,500 73,000 $ 218,000 S 172,500 22,000 310,000 92,000 Interest expense Income before income taxes Income tax expense Net incomc WAHLBERG COMPANY Balance Sheets December 31 2019 2018 Assets Current asscts S60,100 S 64,200 50,000 Cash Debt investments (short-term) 74,000Explanation / Answer
a). Earning per share: Net Income / No. of share outstanding
= 218000/(290000/5) = 218000/58000 shares = 3.75per share
b).Return on Common stockholder's equity = Net Income / Average common stockholder's equity
Average common stockholder's equity = (603400+465400)/2= 534400
Return on common stockholder's equity = 218000/534400 = 0.407 or 40.79%
c) Return on assets = Net Income / Total Assets
=218000/1026900 = 0.212 or 21.22%
d). Current Ratio = Current Assets / Current Liabilities
= 377900/203500 = 1.857
e). Account Receivable Turnover = Net Credit Sales / Average account receivable
Average Account receivable = (117800+102800)/2 = 110300
Account Receivable Turnover = 1890540/110300 = 17.14 times
f).Average collection period= 365/Account receivable turnover
= 365/17.14 = 21.29 days
g). Inventory Turnover = Cost of Goods sold / Average Inventory
Average Inventory = (126000+115500)/2 = 120750
Inventory Turnover = 1058540/120750 = 8.76
h). Days in inventory = 365 days / Inventory turnover ratio
= 365/ 8.76 = 41.66 days
i). Times Interest Earned = Income before Interest tax and Dividend / Interest Expenses
= 332000/22000 = 15.09
j). Asset Turnover = Net sales / Average total assets
Average total assets = (1026900+852800)/2 = 939850
Asset Turnover = 1890540 / 939850 = 2.01
k). Debt to assets ratio = Total Liabilities / Total Assets
=423500/1026900 = 0.4124
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