Chapter 6 Discussion and Assignment.pdf

Chapter 6 Discussion and Assignment.pdf - [mun daaptea P...

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Unformatted text preview: [mun daaptea} P 6-25 Consecutive five-year balance sheets and income statements of Anne Gibson Corpo- ration follows ANNE GIBSON CORPORATION Balance Sheet December 31, 2007 through December 31, 2011 (Dollars in thousands} 201 1 2010 2009 2008 2007 Assets: Current assets Cash $ 47,200 $ 46,000 $ 45,000 $ 44,000 $ 43,000 Marketable securities 2,000 2,500 3,000 3,000 3,000 Accounts receivable, less allowance of $1,000, December 31, 2011; $900, December 31, 2010; $900, December 31, 2009; $800, December 31, 2008; $1,200, December 31, 2007 131,000 128,000 127,000 126,000 125,000 Inventories 122,000 124,000 126,000 127,000 125,000 Prepaid expenses 3,000 2,500 2,000 1,000 1,000 Total current assets 305,200 303,000 303,000 301,000 297,000 Property, plant and equipment, net 240,000 239,000 238,000 237,500 234,000 Other assets 10,000 8,000 7,000 6,500 7,000 Total assets $555,200 $550,000 $548,000 $545,000 $538,000 Liabilities and stockholders’ equity: Current liabilities Accounts payable $ 72,000 $ 73,000 $ 75,000 $ 76,000 $ 73,5 00 Accrued compensation 26,000 25,000 25,500 26,000 26,000 Income taxes 11,500 12,000 13,000 12,500 11,000 Total current liabilities 109,500 110,000 113,500 114,500 115,500 Long-term debt 68,000 60,000 58,000 60,000 62,000 Deferred income taxes 25,000 24,000 23,000 22,000 21,000 Stockholders’ equity 352,700 356,000 353,500 348,500 339,500 Toral liabilities and stockholders' equity $555,200 $550,000 $548,000 $545,000 $538,000 3 ANNE GIBSON CORPORATION Statement of Earnings For Years Ended December 31, 2007-2011 {In thousands, except per share) 2011 2010 2009 2008 2007 Net sales $880,000 $910,000 $840,000 $325,000 $820,000 Cost of goods sold 740,000 760,000 704,000 695,000 692,000 Gross profit 140,000 150,000 136,000 130,000 128,000 Selling and administrative expense 53,000 52,000 50,000 49,800 49,000 9 Interest expense 6,700 5,900 5,800 5,900 6,000 Earnings from continuing operations before income taxes 80,300 92,100 80,200 74,300 73,000 Income taxes 26,000 27,500 28,000 23,000 22,500 Net earnings $ 54,300 $ 64,600 $ 52,200 $ 51,300 $ 50,500 Earnings per share $ 1.40 $ 1.65 $ 1.38 $ 1.36 $ 1.33 (continued) 262 CHAPTER 6 . Liquidity of Short-TerrmAssets: Related Debt-Paying Ability (F 6-25 CONTINUED) Required a. Using year-end balance sheet figures, compute the following for the maximum number of years, based on the available data: Days’ sales in receivables Accoants receivable turnover Accounts receivable turnover in days Days’ sales in inventory Inventory turnover Inventory turnover in days . Operating cycle . Working capital . Current ratio 10. Acid-test ratio 11. Cash ratio 12. Sales to working capital wwvnwewwe lbw-Mr?"r"-"-?-'-'W1?"5'ITFH H . .—'1..'...- "-1- '— i (1;; Using average balance sheet figures, as suggested in the chapter, compute the following for the maximum number of years, based on the available data: Days' sales in receivables Accounts receivable turnover Accounts receivable turnover in days Days’ sales in inventory Inventory turnover Inventory turnover in days . Operating cycle . Working capital 9. Current ratio 10. Acid—test ratio 11. Cash ratio 12. Sales to working capital ( c) Comment on trends indicated in short-term liquidity. wwawawwe ...
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