Indigo Corporation Indigo Corporation Balance Sheets December 31 Income Statements For the Years Ended December 31 2020 2019 2020 2019 2018 Sales revenue $ 21,000 $606,000 $ 31,000 $ 19,000 $746,000 Cash Less: Sales returns and allowances 41,000 31,000 Accounts receivable (net) 49,000 51,000 46,000 Other current assets 96,000 Net sales 101,000 70,000 705,000 575,000 76,000 51,000 431,000 Investments 61,000 Cost of goods sold 356,000 500,000 370,000 358,000 Gross profit Plant and equipment (net) 274,000 219,000 $739,000 $614,000 $547,000 Operating expenses (including income taxes) 181,000 151,000 $ 68,000 $ 93,000 $ 86,000 $ 81,000 $ 71,000 Current liabilities Net income Long-term debt 151,000 91,000 56,000 Additional information: Common stock, $10 par 306,000 326,000 316,000 126,000 Retained earnings 176,000 114,000 The market price of Indigo's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 1. You must compute dividends paid. All dividends were paid in cash. $739,000 $614,000 $547,000 2. (a) Compute the following ratios for 2019 and 2020. (Round answers to 2 decimal places, e.g. 1.83 or 1.83%.) 2020 2019 Profit margin 11.83 % 13.19 % Gross profit rate 38.09 % 38.87 % Asset turnover 1.04 times 0.99 times х Earnings per share 2.15 2.85 Price-earnings ratio 2.98 times 3.49 times Payout ratio 46.24 % 82.35 % Debt to assets ratio 20.43 % 14.82 % Open Show Work Click if you would like to Show Work for this question:
Indigo Corporation Indigo Corporation Balance Sheets December 31 Income Statements For the Years Ended December 31 2020 2019 2020 2019 2018 Sales revenue $ 21,000 $606,000 $ 31,000 $ 19,000 $746,000 Cash Less: Sales returns and allowances 41,000 31,000 Accounts receivable (net) 49,000 51,000 46,000 Other current assets 96,000 Net sales 101,000 70,000 705,000 575,000 76,000 51,000 431,000 Investments 61,000 Cost of goods sold 356,000 500,000 370,000 358,000 Gross profit Plant and equipment (net) 274,000 219,000 $739,000 $614,000 $547,000 Operating expenses (including income taxes) 181,000 151,000 $ 68,000 $ 93,000 $ 86,000 $ 81,000 $ 71,000 Current liabilities Net income Long-term debt 151,000 91,000 56,000 Additional information: Common stock, $10 par 306,000 326,000 316,000 126,000 Retained earnings 176,000 114,000 The market price of Indigo's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 1. You must compute dividends paid. All dividends were paid in cash. $739,000 $614,000 $547,000 2. (a) Compute the following ratios for 2019 and 2020. (Round answers to 2 decimal places, e.g. 1.83 or 1.83%.) 2020 2019 Profit margin 11.83 % 13.19 % Gross profit rate 38.09 % 38.87 % Asset turnover 1.04 times 0.99 times х Earnings per share 2.15 2.85 Price-earnings ratio 2.98 times 3.49 times Payout ratio 46.24 % 82.35 % Debt to assets ratio 20.43 % 14.82 % Open Show Work Click if you would like to Show Work for this question:
Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 15.17EX: Profitability ratios The following selected data were taken from the financial statements of...
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Transcribed Image Text:Indigo Corporation
Indigo Corporation
Balance Sheets
December 31
Income Statements
For the Years Ended December 31
2020
2019
2020
2019
2018
Sales revenue
$ 21,000
$606,000
$ 31,000
$ 19,000
$746,000
Cash
Less: Sales returns and allowances
41,000
31,000
Accounts receivable (net)
49,000
51,000
46,000
Other current assets
96,000
Net sales
101,000
70,000
705,000
575,000
76,000
51,000
431,000
Investments
61,000
Cost of goods sold
356,000
500,000
370,000
358,000 Gross profit
Plant and equipment (net)
274,000
219,000
$739,000
$614,000
$547,000
Operating expenses (including income taxes)
181,000
151,000
$ 68,000
$ 93,000
$ 86,000
$ 81,000
$ 71,000
Current liabilities
Net income
Long-term debt
151,000
91,000
56,000
Additional information:
Common stock, $10 par
306,000
326,000
316,000
126,000
Retained earnings
176,000
114,000
The market price of Indigo's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively.
1.
You must compute dividends paid. All dividends were paid in cash.
$739,000
$614,000
$547,000
2.
(a)
Compute the following ratios for 2019 and 2020. (Round answers to 2 decimal places, e.g. 1.83 or 1.83%.)
2020
2019
Profit margin
11.83 %
13.19 %
Gross profit rate
38.09 %
38.87 %
Asset turnover
1.04 times
0.99 times
х
Earnings per share
2.15
2.85
Price-earnings ratio
2.98 times
3.49 times
Payout ratio
46.24 %
82.35 %
Debt to assets ratio
20.43 %
14.82 %
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