Problem 13-4 (Part Level Submission) CRANE COMPANY Balance Sheets December 31 As
ID: 2532012 • Letter: P
Question
Problem 13-4 (Part Level Submission)
CRANE COMPANY
Balance Sheets
December 31
Assets
2017
2016
$ 72,000
$ 64,000
54,000
42,000
104,000
91,000
230,000
165,000
22,000
25,000
134,000
134,000
261,000
189,000
$877,000
$710,000
Liabilities and Stockholders’ Equity
$171,000
$108,000
65,000
50,000
41,000
41,000
249,000
172,000
207,000
207,000
144,000
132,000
$877,000
$710,000
CRANE COMPANY
Income Statements
For the Years Ended December 31
2017
2016
$896,000
$796,000
648,000
574,000
248,000
222,000
189,000
165,000
$ 59,000
$ 57,000
(a1)
2017
2016
% Change
LIQUIDITY
2017
2016
% Change
PROFITABILITY
Problem 13-4 (Part Level Submission)
The following financial information is for Crane Company.CRANE COMPANY
Balance Sheets
December 31
Assets
2017
2016
Cash$ 72,000
$ 64,000
Debt investments (short-term)54,000
42,000
Accounts receivable104,000
91,000
Inventory230,000
165,000
Prepaid expenses22,000
25,000
Land134,000
134,000
Building and equipment (net)261,000
189,000
Total assets$877,000
$710,000
Liabilities and Stockholders’ Equity
Notes payable$171,000
$108,000
Accounts payable65,000
50,000
Accrued liabilities41,000
41,000
Bonds payable, due 2020249,000
172,000
Common stock, $10 par207,000
207,000
Retained earnings144,000
132,000
Total liabilities and stockholders’ equity$877,000
$710,000
CRANE COMPANY
Income Statements
For the Years Ended December 31
2017
2016
Sales revenue$896,000
$796,000
Cost of goods sold648,000
574,000
Gross profit248,000
222,000
Operating expenses189,000
165,000
Net income$ 59,000
$ 57,000
Additional information:
1. Inventory at the beginning of 2016 was $117,000. 2. Accounts receivable (net) at the beginning of 2016 were $88,000. 3. Total assets at the beginning of 2016 were $642,000. 4. No common stock transactions occurred during 2016 or 2017. 5. All sales were on account.
Explanation / Answer
Liquidity 2017 2016 % Change Current Ratio 1.74 1.94 -11% Accounts Receivable Turnover 1.13 1.18 -4% Inventory Turnover 3.28 4.07 -19% Profitability 2017 2016 % Change Profit margin 6.58% 7.16% -8% Assets Turnover 1.13 1.18 -4% Return on Assets 7.44% 8.43% -12% Earning Per Shares 2.85 2.75 4% 2017 2016 Ratio Formula Calculation Ratio Current Ratio Current Assets/current Liabilities 482000/277000 1.74 387000/199000 1.94 Accounts Receivable Turnover Net Credit Sales/ Average Accounts Receivable 896000/97500 9.19 796000/89500 8.89 Inventory Turnover COGS/ Average Inventory 648000/197500 3.28 574000/141000 4.07 Profit margin Net Income/Sales 59000/896000 6.58% 57000/796000 7.16% Assets Turnover Net Sales/ Average Assets 896000/793500 1.13 796000/676000 1.18 Return on Assets Net Income/Average Assets 59000/793500 7.44% 57000/676000 8.43% Earning Per Shares Earning Available of Equity Shareholders/No. of Shares 59000/20700 2.85 57000/20700 2.75 2017 2016 Current Assets (877000-261000-134000) 482,000.00 710000-189000-134000 387,000.00 Current Liabilities 171000+65000+41000 277,000.00 108000+50000+41000 199,000.00 Net Credit Sales 896,000.00 796,000.00 Average Accounts Receivable (91000+104000)/2 97,500.00 (91000+88000)/2 89,500.00 COGS 648,000.00 574,000.00 Average Inventory (230000+165000)/2 197500 (117000+165000)/2 141,000.00 Average Total Assets (877000+710000)/2 793,500.00 (642000+710000)/2 676,000.00 Earning Available of Equity Shareholders 59,000.00 57,000.00 No. Shares 207000/10 20700 207000/10 20700