Grouper Corporation was formed 5 years ago through a public subscription of comm
ID: 2594260 • Letter: G
Question
Grouper Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Grouper and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2018, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,140 notes, which are due on June 30, 2018, and September 30, 2018. Another note of $5,990 is due on March 31, 2019, but he expects no difficulty in paying this note on its due date. Brown explained that Grouper’s cash flow problems are due primarily to the company’s desire to finance a $301,430 plant expansion over the next 2 fiscal years through internally generated funds.
The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years.
GROUPER CORPORATION
BALANCE SHEET
MARCH 31
2018
2017
GROUPER CORPORATION
INCOME STATEMENT
FOR THE FISCAL YEARS ENDED MARCH 31
2018
2017
(a) Compute the following items for Grouper Corporation. (Round answer to 2 decimal places, e.g. 2.25 or 2.25%.)
2017
2018
GROUPER CORPORATION
BALANCE SHEET
MARCH 31
2018
2017
Cash $18,340 $12,500 Notes receivable 147,090 132,010 Accounts receivable (net) 132,350 125,250 Inventories (at cost) 105,410 49,960 Plant & equipment (net of depreciation) 1,434,630 1,411,230 Total assets $1,837,820 $1,730,950 Liabilities and Owners’ Equity Accounts payable $79,720 $91,760 Notes payable 75,550 61,120 Accrued liabilities 6,060 11,960 Common stock (130,000 shares, $10 par) 1,305,620 1,311,870 Retained earningsa 370,870 254,240 Total liabilities and stockholders’ equity $1,837,820 $1,730,950 aCash dividends were paid at the rate of $1 per share in fiscal year 2017 and $2 per share in fiscal year 2018.Explanation / Answer
Answer:
1
2018
2017
-1
Current ratio
Current ratio
=current Assets/current liabelity
2.50
1.94
current Assets
403,190
319,720
Current liabelity
161,330
164,840
-2
Acid-test (quick) ratio
1.85
1.64
Current ratio
=Cash+recivable+mrakatable security /current liabelity
297,780
269,760
ash+recivable+mrakatable security
161,330
164,840
Current liabelity
-3
Inventory turnover
Inventory turnover
=cost of goods sold/ inventory
14.55
28.35
Cost of goods sold
1,534,160
1,416,420
Inventory
105,410
49,960
-4
Return on assets
Return on assets
=Net income/ total Assets
20.66%
18.05%
Net income
$379,626
$312,420
Total Assets
$1,837,820
$1,730,950
2018
2017
Current ratio
2.50
1.94
Acid-test (quick) ratio
1.85
1.64
Inventory turnover
14.55
28.35
Return on assets
20.66%
18.05%
_______________________________________________________________
2
% increase
Sales revenue
11.64%
Cost of goods sold
8.31%
Gross margin
15.28%
Net income
21.51%
2018
2017
-1
Current ratio
Current ratio
=current Assets/current liabelity
2.50
1.94
current Assets
403,190
319,720
Current liabelity
161,330
164,840
-2
Acid-test (quick) ratio
1.85
1.64
Current ratio
=Cash+recivable+mrakatable security /current liabelity
297,780
269,760
ash+recivable+mrakatable security
161,330
164,840
Current liabelity
-3
Inventory turnover
Inventory turnover
=cost of goods sold/ inventory
14.55
28.35
Cost of goods sold
1,534,160
1,416,420
Inventory
105,410
49,960
-4
Return on assets
Return on assets
=Net income/ total Assets
20.66%
18.05%
Net income
$379,626
$312,420
Total Assets
$1,837,820
$1,730,950
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