Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 190 $ 270 Accounts receivable, net 300 320 Inventory 270 240 Prepaid expenses 20 20 Total current assets 780 850 Plant and equipment, net 1,000 1,060 Total assets $ 1,780 $ 1,910 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 240 $ 270 Accrued liabilities 50 50 Notes payable, short term 40 40 Total current liabilities 330 360 Bonds payable 230 360 Total liabilities 560 720 Stockholders’ equity: Common stock, $2 par value 200 200 Additional paid-in capital 330 330 Retained earnings 690 660 Total stockholders’ equity 1,220 1,190 Total liabilities & stockholders’ equity $ 1,780 $ 1,910 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $ 1,340 Cost of goods sold 840 Gross margin 500 Selling and administrative expense 415 Net operating income 85 Interest expense 20 Net income before taxes 65 Income taxes (30%) 20 Net income $ 45 Dividends on common stock during Year 2 totaled $15 thousand. The market price of common stock at the end of Year 2 was $16.30 per share. Required: Compute the following for Year 2: g. Return on equity. (Round your "Percentage" answer to 2 decimal places.) h. Book value per share. (Round your answer to 2 decimal places.) i. Working capital. (Input your answer in thousands of dollars.)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Liquidity ratios: current ratio; quick, or acid test,...

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Question

Hyrkas Corporation's most recent balance sheet and income statement appear below:

	Year 2	Year 1
Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
Assets
Current assets:
Cash	$ 190	$ 270
Accounts receivable, net	300	320
Inventory	270	240
Prepaid expenses	20	20
Total current assets	780	850
Plant and equipment, net	1,000	1,060
Total assets	$ 1,780	$ 1,910
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 240	$ 270
Accrued liabilities	50	50
Notes payable, short term	40	40
Total current liabilities	330	360
Bonds payable	230	360
Total liabilities	560	720
Stockholders’ equity:
Common stock, $2 par value	200	200
Additional paid-in capital	330	330
Retained earnings	690	660
Total stockholders’ equity	1,220	1,190
Total liabilities & stockholders’ equity	$ 1,780	$ 1,910

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$ 1,340
Cost of goods sold	840
Gross margin	500
Selling and administrative expense	415
Net operating income	85
Interest expense	20
Net income before taxes	65
Income taxes (30%)	20
Net income	$ 45

Dividends on common stock during Year 2 totaled $15 thousand. The market price of common stock at the end of Year 2 was $16.30 per share.

Required:

Compute the following for Year 2:

g. Return on equity. (Round your "Percentage" answer to 2 decimal places.)

h. Book value per share. (Round your answer to 2 decimal places.)

i. Working capital. (Input your answer in thousands of dollars.)

j. Current ratio. (Round your answer to 2 decimal places.)

k. Acid-test (quick) ratio. (Round your answer to 2 decimal places.)

l. Accounts receivable turnover. (Round your answer to 2 decimal places.)

m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

n. Inventory turnover. (Round your answer to 2 decimal places.)

o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

p. Times interest earned ratio. (Round your answer to 2 decimal places.)

q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

g. Return on equity
h. Book value per share
i. Working capital
j. Current ratio
k. Acid-test ratio
I. Accounts receivable turnover
m. Average collection period
n. Inventory turnover
o. Average sale period
p. Times interest earned ratio
q. Debt-to-equity ratio
%
days
days

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