Exercise 913 The condensed financial statements of Ivanhoe C

Exercise 9-13 The condensed financial statements of Ivanhoe Company for the years 201 IVANHOE COMPANY Balance Sheets December 31 (in thousands) 2017 2016 Current assets Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses $330$360 510 480 160 580 550 130 Total current assets 1,590 1,510 Property, plant, and equipment (net) 10 380 20 120 530 510 $2,650 $2,520 $930$900 570 470 1,1501,150 $2,520 Investments Intangibles and other assets Total assets Current liabilities Long-term liabilities Stockholders\' equity-common Total liabilities and stockholders\' equity $2,650 IVANHOE COMPANY Income Statements Privacy Policy 1 2000-2018 John Wiley & Sons Ins, All Rights Reserved. A Division of John Wilcy &

Solution

For 2016

Current ratio = Current assets/Current liabilities

= 1,510/900

= 1.68:1

Average inventory = (Opening inventory + Closing inventory)/2

= (410 + 480)/2

= 890/2

= $445 (Thousands)

Inventory turnover = Cost of goods sold/Average inventory

= 1,000/445

= 2.25

Profit margin = Net income/Net sales

= 120/3,550

= 3.38%

Average total assets = (Opening total assets + Closing total assets)/2

= (2,720 + 2,520)/2

= 5,240/2

= $2,620 (thousands

Return on assets = Net income/Average total assets

= 120/2,620

= 4.58%

Average common stockholders\' equity = (Opening common stockholders\' equity + Closing common stockholders\' equity)/2

= (970 + 1150)/2

= 2120/2

= $1,060 (thousands)

Return on common stockholders\' equity = Net income/Average common stockholders\' equity

= 120/1060

= 11.32%

Debt = Current liabilities + Long term liabilities

= 900 + 470

= $1,370 (thousands)

Debt to assets ratio = Debt/Assets

= 1370/2520

= 54.36%

EBIT = Profit after tax + Interest

= 200 + 20

= $220 (thousands)

Times interest earned = EBIT/Interest

= 220/20

= 11 times

For 2017

Current ratio = Current assets/Current liabilities

= 1,590/930

= 1.71:1

Average inventory = (Opening inventory + Closing inventory)/2

= (480 + 550)/2

= 1030/2

= $515 (Thousands)

Inventory turnover = Cost of goods sold/Average inventory

= 1,080/515

= 2.10

Profit margin = Net income/Net sales

= 240/3,890

= 6.17%

Average total assets = (Opening total assets + Closing total assets)/2

= (2,520 + 2,650)/2

= 5,170/2

= $2,585 (thousands

Return on assets = Net income/Average total assets

= 240/2,585

= 9.28%

Average common stockholders\' equity = (Opening common stockholders\' equity + Closing common stockholders\' equity)/2

= (1150 + 1150)/2

= 2300/2

= $1,150 (thousands)

Return on common stockholders\' equity = Net income/Average common stockholders\' equity

= 240/1,150

= 20.87%

Debt = Current liabilities + Long term liabilities

= 930 + 570

= $1,500 (thousands)

Debt to assets ratio = Debt/Assets

= 1,500/2,650

= 56.60%

EBIT = Profit after tax + Interest

= 400 + 10

= $410 (thousands)

Times interest earned = EBIT/Interest

= 410/10

= 41 times