Reference no: EM131240139
Changes in various ratios: presented below is selected information from Brimmerer Company:
2013 2012
sales revenue $910,000 $840,000
cost of goods sold $575,000 $542,000
interest expense $20,000 $20,000
income tax expense $27,000 $24,000
net income $61,000 $52,000
cash flow from operating activities $65,000 $55,000
capital expenditures $42,000 $45,000
Accounts Receivable (net), Dec 31 $126,000 $120,000
inventory December 31 $196,000 $160,000
stockholders equity December 31 $450,000 $400,000
total assets December 31 $730,000 $660,000
Required
a. Calculate the following ratios for 2013. The 2012 results are given for comparative purposes.
b. Comment on the changes between the two years
2012
1. Gross profit percentage 35.5%
2. return on assets 8.3%
3. return on sales 6.2%
4. return on common stockholders equity (no preferred stock was outstanding) 13.9%
5. accounts receivable turnover 8%
6. average collection. 45.6 days
7. inventory turnover 3.61
8. Times interest earned ratio 4.8
9. operating cash flow to capital expenditures ratio 1.22
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