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P2-6A Condensed balance sheet and income statement data for Sadecki
Corporation are presented here and on the next page.
Compute and interpret liquidity, solvency, and profitability ratios.
|
SADECKI
Balance
December
|
||
|
Assets
|
2014
|
2013
|
|
Cash
|
$ 28,000
|
$ 20,000
|
|
Receivables (net)
|
70,000
|
62,000
|
|
Other current assets
|
90,000
|
73,000
|
|
Long-term investments
|
62,000
|
60,000
|
|
Property, plant, and equipment
|
510,000
|
470,000
|
|
Total assets
|
$760,000
|
$685,000
|
|
Liabilities and Stockholders’
|
|
|
|
Current liabilities
|
$ 75,000
|
$ 70,000
|
|
Long-term liabilities
|
80,000
|
90,000
|
|
Common stock
|
330,000
|
300,000
|
|
Retained earnings
|
275,000
|
225,000
|
|
Total liabilities and
|
$760,000
|
$685,000
|
|
SADECKI
Income
For
|
||
| |
2014
|
2013
|
|
Sales revenue
|
$750,000
|
$680,000
|
|
Cost of goods sold
|
440,000
|
400,000
|
|
Operating expenses (including
|
240,000
|
220,000
|
|
Net income
|
$ 70,000
|
$ 60,000
|
Additional information:
|
Net cash provided by operating
|
$82,000
|
$56,000
|
|
Cash used for capital expenditures
|
$45,000
|
$38,000
|
|
Dividends paid
|
$20,000
|
$15,000
|
|
Average number of shares
|
33,000
|
30,000
|
Instructions
Compute these values and ratios for 2013 and 2014.
(a) Earnings per share.
(b) Working capital.
(c) Current ratio.
(d) Debt to assets ratio.
(e) Free cash flow.
(f) Based on the ratios calculated, discuss briefly the improvement or
lack thereof in financial position and operating results from 2013 to 2014 of
Sadecki Corporation.
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