Problem 25A The following are financial statements of Ohara

Problem 2-5A The following are financial statements of Ohara Company Ohara Company Income Statement For the Year Ended December 31, 2017 Net sales Cost of goods sold Selling and administrative expenses Interest expense Income tax expense Net income $2,218,500 1,012,400 906,000 78,000 69,000 $ 153,100 Ohara Company Balance Sheet December 31, 2017 Assets Current assets Cash Debt investments Accounts receivable (net) Inventory Total current assets 60,100 84,000 169,800 145,000 458,900 575,300 $ 1,034,200 Plant assets (net) Total assets

Solution

Req a: Working capital: Current Assets -Current Liabilities Working capital = 458900-195500 = $ 263400 Current ratio: Current Assets / Current Liabilities 458900 /195500 = 2.35 times Free cash flows:\' Net cash provided from operating activities: 190800 Less: Net cash used in capital expenditure 92000 free cash flows 98800 Debt to assets ratio: Debts/ Total assets 395500 /1034200 = 0.38 Earnings per share: Net income during the year/ Number of common Shares 153100 /50000 = 3.062