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GARFIELD, INC. Comparative Income Statement Years Ended December 31, 2018 ard 2017 2018 2017 Net Sales Revenue $ 461,000 $ 424,000 Cost of Goods Sold 241,000 211,000 Gross Profit 220,000 213,000 Operating Expenses 137,000 135,000 Income from Operations 83,000 78,000 Interest Expense 9,000 13,000 Income Before Income Tax 74,000 65,000 Income Tax Eхрепse 18,000 24,000 Net Income $ 56,000 $ 41,000 GARFIE.D, INC. Comparative 3alance Sheet December 31, 2018 and 2017 2018 2017 2016* Assets Current Assets: Cash $ 99,000 $ 98,000 Accounts Receivable, Net 108,000 114,000 $ 107,000 Merchandise Inventory 146,000 164,000 202,000 Prepaid Expenses 20,000 9,000 Total Current Assets 373,000 385,000 Property, Plant, and Equipment, Net 211,000 181,000 Total Assets $ 584,000 5 566,000 $ 602,000 Liabilities Total Current Liabilities $ 227,000 $ 246,000 Long-term Liabilities 117,000 100,000 Total Liabilities 344,000 346,000 Stockholders' Equity Preferred Stock, 3% 98,000 98,000 Common Stockholders' Equity, no par 142,000 122,000 89,000 Total Liabilities and Stockholders' Equity $ 584,000 $ 566,000 Selected 2016 amounts

GARFIELD, INC. Comparative Income Statement Years Ended December 31, 2018 ard 2017 2018 2017 Net Sales Revenue $ 461,000 $ 424,000 Cost of Goods Sold 241,000 211,000 Gross Profit 220,000 213,000 Operating Expenses 137,000 135,000 Income from Operations 83,000 78,000 Interest Expense 9,000 13,000 Income Before Income Tax 74,000 65,000 Income Tax Eхрепse 18,000 24,000 Net Income $ 56,000 $ 41,000 GARFIE.D, INC. Comparative 3alance Sheet December 31, 2018 and 2017 2018 2017 2016* Assets Current Assets: Cash $ 99,000 $ 98,000 Accounts Receivable, Net 108,000 114,000 $ 107,000 Merchandise Inventory 146,000 164,000 202,000 Prepaid Expenses 20,000 9,000 Total Current Assets 373,000 385,000 Property, Plant, and Equipment, Net 211,000 181,000 Total Assets $ 584,000 5 566,000 $ 602,000 Liabilities Total Current Liabilities $ 227,000 $ 246,000 Long-term Liabilities 117,000 100,000 Total Liabilities 344,000 346,000 Stockholders' Equity Preferred Stock, 3% 98,000 98,000 Common Stockholders' Equity, no par 142,000 122,000 89,000 Total Liabilities and Stockholders' Equity $ 584,000 $ 566,000 Selected 2016 amounts

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.14P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
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Using ratios to evaluate a stock investment

Comparative financial statement data of Garfield Inc. follow:

  1. Market price of Garfield’s common stock:$69.36 at December 31 2018 and $38.04 at December 31, 2017.
  2. Common shares outstanding 14, 000 on December 31, 2018 and 12,000 on December 31 2017 and 2016. 
  3. All sales are on credit.

Requirements

  1. Compute the following ratios tor 2018 and 2017:

a. current ratio

b. Cash ratio

c. Times-interest-earned ratio

d. Inventory turnover

e. Gross profit percentage

f. Debt to equity ratio

g. Rate of return on common stockholder’s equity

h. Earnings per share of common stock

i. Price/earnings ratio

2. Decide (a) whether Garfield’s ability to pat debts and to sell inventory improved or deteriorated during 2018 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.

GARFIELD, INC. Comparative Income Statement Years Ended December 31, 2018 ard 2017 2018 2017 Net Sales Revenue $ 461,000 $ 424,000 Cost of Goods Sold 241,000 211,000 Gross Profit 220,000 213,000 Operating Expenses 137,000 135,000 Income from Operations 83,000 78,000 Interest Expense 9,000 13,000 Income Before Income Tax 74,000 65,000 Income Tax Eхрепse 18,000 24,000 Net Income $ 56,000 $ 41,000
Transcribed Image Text:GARFIELD, INC. Comparative Income Statement Years Ended December 31, 2018 ard 2017 2018 2017 Net Sales Revenue $ 461,000 $ 424,000 Cost of Goods Sold 241,000 211,000 Gross Profit 220,000 213,000 Operating Expenses 137,000 135,000 Income from Operations 83,000 78,000 Interest Expense 9,000 13,000 Income Before Income Tax 74,000 65,000 Income Tax Eхрепse 18,000 24,000 Net Income $ 56,000 $ 41,000
GARFIE.D, INC. Comparative 3alance Sheet December 31, 2018 and 2017 2018 2017 2016* Assets Current Assets: Cash $ 99,000 $ 98,000 Accounts Receivable, Net 108,000 114,000 $ 107,000 Merchandise Inventory 146,000 164,000 202,000 Prepaid Expenses 20,000 9,000 Total Current Assets 373,000 385,000 Property, Plant, and Equipment, Net 211,000 181,000 Total Assets $ 584,000 5 566,000 $ 602,000 Liabilities Total Current Liabilities $ 227,000 $ 246,000 Long-term Liabilities 117,000 100,000 Total Liabilities 344,000 346,000 Stockholders' Equity Preferred Stock, 3% 98,000 98,000 Common Stockholders' Equity, no par 142,000 122,000 89,000 Total Liabilities and Stockholders' Equity $ 584,000 $ 566,000 Selected 2016 amounts
Transcribed Image Text:GARFIE.D, INC. Comparative 3alance Sheet December 31, 2018 and 2017 2018 2017 2016* Assets Current Assets: Cash $ 99,000 $ 98,000 Accounts Receivable, Net 108,000 114,000 $ 107,000 Merchandise Inventory 146,000 164,000 202,000 Prepaid Expenses 20,000 9,000 Total Current Assets 373,000 385,000 Property, Plant, and Equipment, Net 211,000 181,000 Total Assets $ 584,000 5 566,000 $ 602,000 Liabilities Total Current Liabilities $ 227,000 $ 246,000 Long-term Liabilities 117,000 100,000 Total Liabilities 344,000 346,000 Stockholders' Equity Preferred Stock, 3% 98,000 98,000 Common Stockholders' Equity, no par 142,000 122,000 89,000 Total Liabilities and Stockholders' Equity $ 584,000 $ 566,000 Selected 2016 amounts
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