The comparative statements of Lucille Company are presented here.
| LUCILLE COMPANY | ||
| 2012 | 2011 | |
| Net sales | $1,890,540 | $1,750,500 |
| Cost of goods sold | 1,058,540 | 1,006,000 |
| Gross profit | 832,000 | 744,500 |
| Selling and administrative expenses | 500,000 | 479,000 |
| Income from operations | 332,000 | 265,500 |
| Other expenses and losses |
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| Interest expense | 22,000 | 20,000 |
| Income before income taxes | 310,000 | 245,500 |
| Income tax expense | 92,000 | 73,000 |
| Net income | $ 218,000 | $ 172,500 |
| LUCILLE COMPANY | ||
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|
| |
| Assets | 2012 | 2011 |
| Current assets |
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|
| Cash | $ 60,100 | $ 64,200 |
| Short-term investments | 74,000 | 50,000 |
| Accounts receivable | 117,800 | 102,800 |
| Inventory | 126,000 | 115,500 |
| Total current assets | 377,900 | 332,500 |
| Plant assets (net) | 649,000 | 520,300 |
| Total assets | $1,026,900 | $852,800 |
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| Liabilities and Stockholders’ Equity |
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| Current liabilities |
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| Accounts payable | $ 160,000 | $145,400 |
| Income taxes payable | 43,500 | 42,000 |
| Total current liabilities | 203,500 | 187,400 |
| Bonds payable | 220,000 | 200,000 |
| Total liabilities | 423,500 | 387,400 |
| Stockholders’ equity |
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| Common stock ($5 par) | 290,000 | 300,000 |
| Retained earnings | 313,400 | 165,400 |
| Total stockholders’ equity | 603,400 | 465,400 |
| Total liabilities and stockholders’ equity | 1,026,900 | $852,800 |
All sales were on account. Net cash provided by operating activities for 2012 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.
Instructions
Compute the following ratios for 2012.
(a) Earnings per share. (h) Days in inventory.
(b) Return on common stockholders’ equity. (i) Times interest earned.
(c) Return on assets. (j) Asset turnover.
(d) Current ratio. (k) Debt to total assets.
(e) Receivables turnover. (l) Current cash debt coverage.
(f ) Average collection period. (m) Cash debt coverage.
(g) Inventory turnover. (n) Free cash flow.
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