Please help ASAP The following financial information is for Blossom Company. BLO
ID: 2536413 • Letter: P
Question
Please help
ASAP
The following financial information is for Blossom Company. BLOSSOM COMPANY Balance Sheets December 31 2016 Asset Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities Bonds payable, due 2020 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity 2017 $72,000 69,000 52,000 41,000 92,000 234,000 166,000 23,000 131,000 131,000 260,000 187,000 $883,000 $709,000 110,000 24,000 $169,000 $108,000 54,000 42,000 252,000 171,000 205,000 205,000 151,000129,000 $709,000 64,000 42,000 $883,000Explanation / Answer
Solution:
Liquidity Ratio:
Formula
2017
2016
% Change
Current Ratio
= Total current assets/ Total current liabilities
=(Cash + Debt investments (short-term)+ Accounts receivable + Inventory + Prepaid expenses) / (Notes payable + Accounts payable + Accrued liabilities)
= ($ 72,000 + 52,000 + 110,000+ 234,000 + 24,000) / ($ 169,000 + 64,000 + 42,000)
= ($ 69,000 + 41,000 + 92,000 + 166,000 + 23,000 ) / ($ 108,000 + 54,000 + 42,000)
=(Current ratio in 2017 - Current ratio in 2016 ) / Current ratio in 2016 X 100
= $ 492,000 / $ 275,000
= $ 391,000 / $ 204,000
= (1.79 – 1.92) / 1.92 X 100
Answer
= 1.79 : 1
= 1.92 : 1
= (6.8 %)
Accounts Receivables Turnover
= Net Sales / Average accounts receivables*
=$ 899,000 / $ 101,000
=$ 788,000/ $ 90,000
=(Accounts receivables turnover in 2017 - Accounts receivables turnover in 2016) / Accounts receivables turnover in 2016 X 100
= (8.90 – 8.76) / 8.76 X 100
Answer
= 8.90 Times
= 8.76 Times
= 1.6%
*Average accounts receivables = (Beginning accounts receivable (net) + Ending accounts receivable )/2
=($ 92,000 + 110,000) 2
=$ 101,000
=( $ 88,000 + 92,000)/2
=$ 90,000
Inventory Turnover
= Cost of goods sold / Average inventory*
=$ 647,000 / $ 200,000
=$ 574,000/ $ 141,500
=(Inventory turnover in 2017 – Inventory turnover in 2016) / Inventory turnover in 2016 X 100
= (3.24 – 4.06) / 4.06 X 100
Answer
=3.24 Times
= 4.06 Times
= (20.2%)
*Average inventory = (Beginning accounts receivable (net) + Ending accounts receivable )/2
=($ 166,000 + 234,000) 2
=$ 200,000
=( $ 117,000 + 166,000)/2
=$ 141,500
Solution:
Profitability Ratio:
Formula
2017
2016
% Change
Profit Margin
= Net Income / Net Sales X 100
=(Profit margin in 2017 – Profit margin in 2016 ) / Profit margin in 2016 X 100
= $ 57,000 / $ 899,000 x 100
= $ 55,000 / $ 788,000 X 100
= (6.34 – 6.98) / 6.98 X 100
Answer
= 6.34 %
= 6.98 %
= (9.2 )%
Asset Turnover
= Net Sales / Average total assets*
=$ 899,000 / $ 796,000
=$ 788,000/ $ 670,000
=(Asset turnover in 2017 – Asset turnover in 2016) / Asset turnover in 2016 X 100
= (1.13 – 1.18) / 1.18 X 100
Answer
= 1.13 Times
= 1.18 Times
= (4.2)%
*Average total assets = (Beginning total assets + Ending total assets )/2
=($ 709,000 + 883,000) 2
=$ 796,000
=( $ 631,000 + 709,000)/2
=$ 670,000
Return on assets
= Net Income / Average total assets* X 100
=$ 57,000 / $ 796,000 X 100
=$ 55,000/ $ 670,000 X 100
=(Return on Asset in 2017 – Return on Asset in 2016) / Return on Asset in 2016 X 100
= (7.16 – 8.21) / 8.21 X 100
Answer
=7.16 %
= 8.21 %
= (12.8) %
*Average total assets = (Beginning total assets + Ending total assets )/2
=($ 709,000 + 883,000) 2
=$ 796,000
=( $ 631,000 + 709,000)/2
=$ 670,000
Earnings per share
=Net income / Number of common shares outstanding*
=$ 57,000 / 20,500
= $ 55,000 / 20,500
=(Earnings per share in 2017 – Earnings per share in 2016) / Earnings per share in 2016 X 100
= ($ 2.78 –$ 2.68) / $ 2.68 X100
Answer
=$ 2.78
= $ 2.68
= 3.7%
* Number of common shares outstanding
= $ 205,000 / $ 10
= 20,500 shares
= $ 205,000 / $ 10
=20,500 shares
Formula
2017
2016
% Change
Current Ratio
= Total current assets/ Total current liabilities
=(Cash + Debt investments (short-term)+ Accounts receivable + Inventory + Prepaid expenses) / (Notes payable + Accounts payable + Accrued liabilities)
= ($ 72,000 + 52,000 + 110,000+ 234,000 + 24,000) / ($ 169,000 + 64,000 + 42,000)
= ($ 69,000 + 41,000 + 92,000 + 166,000 + 23,000 ) / ($ 108,000 + 54,000 + 42,000)
=(Current ratio in 2017 - Current ratio in 2016 ) / Current ratio in 2016 X 100
= $ 492,000 / $ 275,000
= $ 391,000 / $ 204,000
= (1.79 – 1.92) / 1.92 X 100
Answer
= 1.79 : 1
= 1.92 : 1
= (6.8 %)
Accounts Receivables Turnover
= Net Sales / Average accounts receivables*
=$ 899,000 / $ 101,000
=$ 788,000/ $ 90,000
=(Accounts receivables turnover in 2017 - Accounts receivables turnover in 2016) / Accounts receivables turnover in 2016 X 100
= (8.90 – 8.76) / 8.76 X 100
Answer
= 8.90 Times
= 8.76 Times
= 1.6%
*Average accounts receivables = (Beginning accounts receivable (net) + Ending accounts receivable )/2
=($ 92,000 + 110,000) 2
=$ 101,000
=( $ 88,000 + 92,000)/2
=$ 90,000
Inventory Turnover
= Cost of goods sold / Average inventory*
=$ 647,000 / $ 200,000
=$ 574,000/ $ 141,500
=(Inventory turnover in 2017 – Inventory turnover in 2016) / Inventory turnover in 2016 X 100
= (3.24 – 4.06) / 4.06 X 100
Answer
=3.24 Times
= 4.06 Times
= (20.2%)
*Average inventory = (Beginning accounts receivable (net) + Ending accounts receivable )/2
=($ 166,000 + 234,000) 2
=$ 200,000
=( $ 117,000 + 166,000)/2
=$ 141,500