****Please type your answer*** 6 The condensed financial statements of Underwood Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.) UNDERWOOD COMPANY Balance Sheets December 31 2020 2019 Current assets Cash and cash equivalents $330 $360 Accounts receivable (net) 470 400 Inventory 460 390 Prepaid expenses 120 160 Total current assets 1,380 1,310 Investments 10 10 Property, plant, and equipment 420 380 Intangibles and other assets 530 510 Total assets $2,340 $2,210 Current liabilities $900 $790 Long-term liabilities 410 380 Stockholders’ equity—common 1,030 1,040 Total liabilities and stockholders’ equity $2,340 $2,210 UNDERWOOD COMPANY Income Statements For the Years Ended December 31 2020 2019 Sales revenue $3,800 $3,460 Costs and expenses Cost of goods sold 955 890 Selling & administrative expenses 2,400 2,330 Interest expense 25 20 Total costs and expenses 3,380 3,240 Income before income taxes 420 220 Income tax expense 126 66 Net income $294 $154 Compute the following ratios for 2020 and 2019. Current ratio. Inventory turnover. (Inventory on 12/31/18 was $340.) Profit margin.
****Please type your answer***
6 The condensed financial statements of Underwood Company for the years 2019 and 2020 are presented as follows. (Amounts in thousands.)
|
UNDERWOOD COMPANY |
||
|
2020 |
2019 |
|
|
Current assets |
||
|
Cash and cash equivalents |
$330 |
$360 |
|
|
470 |
400 |
|
Inventory |
460 |
390 |
|
Prepaid expenses |
120 |
160 |
|
Total current assets |
1,380 |
1,310 |
|
Investments |
10 |
10 |
|
Property, plant, and equipment |
420 |
380 |
|
Intangibles and other assets |
530 |
510 |
|
Total assets |
$2,340 |
$2,210 |
|
Current liabilities |
$900 |
$790 |
|
Long-term liabilities |
410 |
380 |
|
|
1,030 |
1,040 |
|
Total liabilities and stockholders’ equity |
$2,340 |
$2,210 |
|
|
|
UNDERWOOD COMPANY |
||
|
2020 |
2019 |
|
|
Sales revenue |
$3,800 |
$3,460 |
|
Costs and expenses |
||
|
Cost of goods sold |
955 |
890 |
|
Selling & administrative expenses |
2,400 |
2,330 |
|
Interest expense |
25 |
20 |
|
Total costs and expenses |
3,380 |
3,240 |
|
Income before income taxes |
420 |
220 |
|
Income tax expense |
126 |
66 |
|
Net income |
$294 |
$154 |
|
|
Compute the following ratios for 2020 and 2019.
Current ratio .- Inventory turnover. (Inventory on 12/31/18 was $340.)
- Profit margin.
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