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.(LO 2, 4, 5), AP SADECKI CORPORATION
Balance Sheets
December 31
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 (net) 510,000 470,000
Total assets $760,000 $685,000
Liabilities and Stockholders’ Equity
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 stockholders’ equity $760,000 $685,000
SADECKI CORPORATION
Income Statements
For the Years Ended December 31 2014 2013
Sales revenue $750,000 $680,000
Cost of goods sold 440,000 400,000
Operating expenses (including income taxes) 240,000 220,000
Net income $ 70,000 $ 60,000
Additional information:
Net cash provided by operating activities $82,000 $56,000
Cash used for capital expenditures $45,000 $38,000
X`Dividends paid $20,000 $15,000
Average number of shares outstanding 33,000 30,000 Compute these values and ratios for 2013 and 2014.
• (a) Earnings per share. - (p. 722) The net income earned by each share of common stock; computed as net income less preferred dividends divided by the average common shares outstanding.
2013 – Work Shown 60,000(net income) / 30,000 (shares outstanding)
Answer 2
Answer 2.12
2014 – 1.51515 Answer Work Shown 70,000 (net income) / 33,000(shares outstanding)
• (b) Working capital.
• Answer 85,000 Work Shown 155,000 – 70,000
• Answer 113,000 Work shown 28,000 + 70,000+ 90,000 – 75,0000
Current assets − Current liabilities p. 58
•
• (c) Current ratio
• Answer2.2:1 Work