The comparative statements of Lucille Company are presented here. LUCILLE COMPAN
ID: 2493948 • Letter: T
Question
The comparative statements of Lucille Company are presented here.
LUCILLE COMPANY
Income Statements
For the Years Ended December 31
2012
2011
$1,898,475
$1,758,435
1,066,475
1,013,935
832,000
744,500
507,935
486,935
324,065
257,565
23,578
21,578
300,487
235,987
93,578
74,578
$ 206,909
$ 161,409
LUCILLE COMPANY
Balance Sheets
December 31
Assets
2012
2011
$ 60,100
$ 64,200
74,000
50,000
125,735
110,735
127,578
117,078
387,413
342,013
659,260
530,560
$1,046,673
$872,573
Liabilities and Stockholders’ Equity
$ 167,935
$153,335
45,078
43,578
213,013
196,913
230,260
210,260
443,273
407,173
290,000
300,000
313,400
165,400
603,400
465,400
$1,046,673
$872,573
All sales were on account. Net cash provided by operating activities for 2012 was $225,550. Capital expenditures were $136,250, and cash dividends were $58,909.
Compute the following ratios for 2012. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%.)
LUCILLE COMPANY
Income Statements
For the Years Ended December 31
2012
2011
Net sales$1,898,475
$1,758,435
Cost of goods sold1,066,475
1,013,935
Gross profit832,000
744,500
Selling and administrative expenses507,935
486,935
Income from operations324,065
257,565
Other expenses and losses Interest expense23,578
21,578
Income before income taxes300,487
235,987
Income tax expense93,578
74,578
Net income$ 206,909
$ 161,409
Explanation / Answer
Solution :
Formula
Calculation
Answer
a)
Earnings per share
net income/no of shares
206909/(290000/5)
3.57
(b)
Return on common stockholders’ equity
net income/average stockholder equity
206909*2/(603400+465400)
38.72
%
(c)
Return on assets
net income/average total asset
206909*2/(1046673+872573)
21.56
%
(d)
Current ratio
current asset / current liability
387413/213013
1.82
:1
(e)
Receivables turnover
NET CREDIT SALES/AVERAGE RECEIVABLE
(1898475*2/(125735+110735)
16.06
times
(f)
Average collection period
days*average receivable/credit sales
365*(125735+110735)/(1898475*2)
22.73
days
(g)
Inventory turnover
COGS/average inventory
1066475*2/(125578+117078)
8.79
times
(h)
Days in inventory
days*average inventory/COGS
365*(125578+117078)/(1066475*2)
41.52
days
(i)
Times interest earned
EBIT/INTEREST
324065/23578
13.74
times
(j)
Asset turnover
NET SALES/AVERAGE TOTAL ASSET
1898475*2/(1046673+872573)
1.98
times
(k)
Debt to total assets
DEBT/TOTAL ASSET
230260/1046673
22.00
%
(l)
Current cash debt coverage
net cash from operating activities/average current liabilities
225550*2/(213013+196913)
1.10
times
(m)
Cash debt coverage
net cash from operating activities/average total liabilities
225550*2/(443273+407173)
0.53
times
(n)
Free cash flow
Net cash provided by operating activities - capital exp - cash dividend
225550-136250-58909
30,391
Formula
Calculation
Answer
a)
Earnings per share
net income/no of shares
206909/(290000/5)
3.57
(b)
Return on common stockholders’ equity
net income/average stockholder equity
206909*2/(603400+465400)
38.72
%
(c)
Return on assets
net income/average total asset
206909*2/(1046673+872573)
21.56
%
(d)
Current ratio
current asset / current liability
387413/213013
1.82
:1
(e)
Receivables turnover
NET CREDIT SALES/AVERAGE RECEIVABLE
(1898475*2/(125735+110735)
16.06
times
(f)
Average collection period
days*average receivable/credit sales
365*(125735+110735)/(1898475*2)
22.73
days
(g)
Inventory turnover
COGS/average inventory
1066475*2/(125578+117078)
8.79
times
(h)
Days in inventory
days*average inventory/COGS
365*(125578+117078)/(1066475*2)
41.52
days
(i)
Times interest earned
EBIT/INTEREST
324065/23578
13.74
times
(j)
Asset turnover
NET SALES/AVERAGE TOTAL ASSET
1898475*2/(1046673+872573)
1.98
times
(k)
Debt to total assets
DEBT/TOTAL ASSET
230260/1046673
22.00
%
(l)
Current cash debt coverage
net cash from operating activities/average current liabilities
225550*2/(213013+196913)
1.10
times
(m)
Cash debt coverage
net cash from operating activities/average total liabilities
225550*2/(443273+407173)
0.53
times
(n)
Free cash flow
Net cash provided by operating activities - capital exp - cash dividend
225550-136250-58909
30,391