Chapter Two - Wiley

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94 CHAPTER 2 A Further Look at Financial Statements
ROGER PETERSEN COMPANY
Balance Sheets
December 31
Assets 2005 2004
Current assets
Cash $ 60,100 $ 64,200
Short-term investments 54,000 50,000
Accounts receivable (net) 207,800 102,800
Inventory 125,000 115,500
Total current assets 446,900 332,500
Plant assets (net) 625,300 432,000
Total assets $1,072,200 $764,500
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 200,000 $ 65,400
Income taxes payable 43,500 42,000
Total current liabilities 243,500 107,400
Bonds payable 210,000 200,000
Total liabilities 453,500 307,400
Stockholders’ equity
Common stock 330,000 286,500
Retained earnings 288,700 170,600
Total stockholders’ equity 618,700 457,100
Total liabilities and stockholders’ equity $1,072,200 $764,500
Additional information: The cash provided by operating activities for 2005 was $190,800.
The average number of shares outstanding during the year was 50,000. The stock price
at December 31, 2005, was $30.
Instructions
Compute these values and ratios for 2005.
(a) Working capital.
(e) Cash debt coverage ratio.
(b) Current ratio.
(f) Earnings per share.
(c) Current cash debt coverage ratio. (g) Price-earnings ratio.
(d) Debt to total assets ratio.
Compute and interpret
liquidity, solvency, and
profitability ratios.
(SO 5, 7)
P2-7B Condensed balance sheet and income statement data for Gilles Corporation are
presented here.
GILLES CORPORATION
Balance Sheets
December 31
Assets 2005 2004 2003
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 70,000 65,000 48,000
Other current assets 90,000 70,000 64,000
Long-term investments 75,000 60,000 45,000
Plant and equipment (net) 500,000 470,000 358,000
Total assets $760,000 $685,000 $533,000