The following financial statements apply to Jordan Company 2

The following financial statements apply to Jordan Company: 2019 2018 Revenues Net sales Other revenues $210,900 $175,800 6,400 182,200 8,100 219,000 Total revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense 124,800 20,200 9,000 1,800 20,400 176,200 101,600 18,200 8,000 1,800 17 , 900 147,500 Total expenses Net income Assets Current assets $ 42,800 34,700 Cash Marketable securities Accounts receivable Inventories Prepaid expenses 1,800 36,900 100,600 3,700 147,800 106,600 20,900 $ 4,800 6,300 1,800 30,300 95,000 2,700 136,100 106,600 Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders\' Equity Liabilities $275,300 $242,700 Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities $ 39,500 54,300 15,600 69,900 65,900 135,800 15,900 55,400 64,900 120,300 Stockholders\' equity Common stock (45,000 shares) Retained earnings 114,100 7.200 106,900 $275,300 $242,700 114,100 40,900 155,000 Total stockholders\' equity Total liabilities and stockholders\' equity

Solution

Answer to Part e.

Price – Earnings Ratio = Price per Share / Earning per Share

Year 2019:
Price – Earnings Ratio = 4.79 / 0.95
Price – Earnings Ratio = 5.04 times

Year 2018:
Price – Earnings Ratio = 5.96 / 0.77
Price – Earnings Ratio = 7.74 times

Answer to Part f.

Book Value per Share = Total Stockholders’ Equity / Common Stock Outstanding

Year 2019:
Book Value per Share = 155,000 / 45,000
Book Value per Share = $3.44

Year 2018:
Book Value per Share = 106,900 / 45,000
Book Value per Share = $2.38

Answer to Part g.

Interest Earned = EBIT / Interest Expense

Year 2019:
EBIT = Net Income + Interest Expense + Income Tax Expense
EBIT = $42,800 + $1,800 + $20,400
EBIT = $65,000

Interest Earned = 65,000 / 1,800
Interest Earned = 36.11 times

Year 2018:
EBIT = Net Income + Interest Expense + Income Tax Expense
EBIT = $34,700 + $1,800 + $17,900
EBIT = $54,400

Interest Earned = 54,400 / 1,800
Interest Earned = 30.22 times

Answer to Part h.

Working Capital = Current Assets – Current Liabilities

Year 2019:
Working Capital = $147,800 - $55,400
Working Capital = $92,400

Year 2018:
Working Capital = $136,100 - $69,900
Working Capital = $66,200