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2. What conclusion can be drawn from each of the 4 financial ratio categories that you calculated in question 1? (the 4 categories are liquidity and efficiency, solvency, profitability, market) (You should list and identify the 4 ratio categories AND have specific ratios mentioned in your answer) Compare 2020 to 2019 and 2018 to identify trends. You can also compare to the industry averages from the textbook on page 1122.
3. Was Koffee Corporation wise to expand operations? Yes or no and a brief explanation.

Koffee Corporation Financial Accounting II Case Study ACC 1175 The following are condensed financial statements of Koffee Corporation for the three years ended December 31, 2018, 2019, 2020. Koffee Corporation Comparative Balance Sheets For the years ending December 31 Current Assets 2020 2019 2018 Cash 47 32 Accounts Receivable 25 18 12 Less: Allowance for Doubtful 24 16 Accounts Inventories 54 38 Supplies 11 9 Total Current Assets 136 95 Capital Assets Less: Accumulated Depreciation 537 330 Total Assets 673 425 Current Liabilities Accounts Payable 80 12 Other Accrued Liabilities 30 13 Total Current Liabilities 110] 25 Long Term Notes Payable 60 60 Total Liabilities 170 85 Shareholders' Equity Common Shares 360 240 Retained Earnings 143 100 Total Shareholders' Equity 503 340 Total Liabilities and Shareholders' 673 425 Equity 634 97 2 IN 375 45 10 256 27 37 12 30 7 86 229 315 15 20 35 0 35 240 40 280 315 Koffee Corporation Comparative Income Statements For the years ending December 31 2020 2019 290 38 213 251 Sales Cost of Goods Sold Beginning Inventory Add: Purchases Less: Ending Inventory Cost of Goods Sold Gross Profit Less: Operating Expenses Net Income from Operations (IBIT) Interest Expense Income Before Income Tax Income Tax Net Income Balance, January 1 Add: Net Income for the Year Less: Dividend Balance, December 31 143 The following additional information is available: a. All sales are on credit; credit terms are net 60 days after invoice date. b. Number of shares of common stock were outstanding in 2018 Number of shares of common stock were outstanding in 2019 On January 1, 2020, 20 additional shares of common stock were sold. The total number of common stock outstanding is now 60 The additional 20 common shares were sold for a total of: c. Opening balance of accounts receivable on January 1, 2018 was d. Net capital assets for January 1, 2018, was e. Total assets on January 1, 2018, was f. Total shareholders equity on January 1, 2018, was g. In 2018, market price per share was In 2019, market price per share was In 2020, market price per share was 54 197 93 37 56 3 30 106 138 38 5 120 53 73 10 63 Koffee Corporation Comparative Statements of Retained Earnings For the Year Ended December 31 2020 2019 100 48 148 888 40 60 28282-3 16 310 250 3.5 210 2.5 100 110 24 76 3 63 103 100 2018 24 78 102 30 2018 150 72 78 30 41 1 47 I 10 2 213 21 50 ACC 1175 - Case Study Required: #1 Based on the information provided, calculate the following for each year. Show your work Formula 2020 2019 1 Current ratio 136/110-1.24:1 95/25-3.8:1 86/35-2.46:1 2 Quick ratio (47+24)/110 0.65:1 (32+16)/25 1.92:1 (37-12)/35-1.4:1 Accounts 3 receivable turnover 290/[(16-24)/2]-14.5 times 210/[(12-16))/2] 15 times 150/[(16-12)]/23 - 10.71 times (24/290) x 365-30.21 days (16/210) x 365-27.81 days (12/150) x 365-29.2 days 197/[(38+54)/2] - 4.28 times 100/[(30+38)/2] -2.94 times 72/[(24-30)/2] -2.66 times (54/197) x 365- 100.05 days (38/100) x 365 138.7 days (30/72) x 365 152.08 days 290/[(673+425)/2] -0.53 times 210/[(425-315)/2] -0.57 times 150/[(315-310)/2] -0.48 times (170/673) x 100%-25.26% (85/425) x 100% - 20% (35/315) x 100%-11.11% (503/673) x 100% 74.74% (340/425) x 100% - 80% (280/315) x 100%-88.89% 56/3-18.67 times 73/3-24.33 times 47/1-47 times (48/290) x 100%-16.55% (63/210) x 100%-30% (40/150) x 100% -26.67% (93/290) x 100% 32.07% (110/210) x 100% - 52.38% (78/150) x 100% 52% 48/[(425+673)/2] x 100% - 8.74% 63/[(315-425)/2] x 100%- 17.03% 40/[(310-315)/2] x 100% - 12.8% 48/[(340+503)/2] x 100% - 11.39% 63/[(280-340)/2] x 100%- 20.32% 40/[(250-280)/2] x 100% - 15.09% 48/60-50.80 63/40-1.58 40/40-1 2.50/.8-3.13 3/1.58 1.9 3.5/1-3.5 [(5/60)/2.50] x 100%-3.33% [(3/40)/3] x 100% - 2.5% [(10/40)/3.5] x 100% -7.14% Days sales uncollected Inventory turnover Days sales in inventory Total asset turnover 8 Debt ratio 9 Equity ratio 5 Times interest earned 11 Profit margin Gross profit ratio Return on total assets 10 12 13 Return on 14 common S/E equity Earnings per share Price-earnings per share 17 Dividend yield 15 16 2018 ACC 1175 - Case Study Required: #1 Based on the information provided, calculate the following for each year. Show your work Formula 2020 2019 1 Current ratio 136/110-1.24:1 95/25-3.8:1 86/35-2.46:1 2 Quick ratio (47-24)/110 0.65:1 (32+16)/25 1.92:1 (37-12)/35-1.4:1 Accounts 3 receivable turnover 290/[(16-24)/2]-14.5 times 210/[(12-16))/2] - 15 times 150/[(16-123/23-10.71 times Days sales uncollected (24/290) x 365-30.21 days (16/210) x 365-27.81 days (12/150) x 365-29.2 days Inventory turnover 197/[(38+54)/2] 4.28 times 100/[(30-38)/2] -2.94 times 72/[(24-30)/2] -2.66 times Days' sales in inventory (54/197) x 365- 100.05 days (38/100) x 365 138.7 days (30/72) x 365-152.08 days Total asset turnover 290/[(673+425)/2] -0.53 times 210/[(425-315)/2] -0.57 150/[(315-310)/2] -0.48 times times 8 Debt ratio (170/673) x 100% - 25.26% (85/425) x 100% - 20% (35/315) x 100%-11.11% 9 Equity ratio (503/673) x 100% - 74.74% (340/425) x 100% 80% (280/315) x 100% 88.89% 56/3-18.67 times 73/3-24.33 times 47/1-47 times (48/290) x 100%-16.55% (63/210) x 100% - 30% (40/150) x 100%-26.67% (93/290) x 100% = 32.07% (110/210) x 100% - 52.38% (78/150) x 100% -52% 48/((425+673)/2] x 100% - 8.74% 63/[(315+425)/2] x 100%- 17.03% 40/[(310-315)/2] x 100% - 12.8% 48/[(340+503)/2] x 100%- 11.39% 63/[(280-340)/2] x 100%- 20.32% 40/[(250-280)/2] x 100% - 15.09% 48/60-$0.80 63/40-1.58 40/40-1 2.50/.8-3.13 3/1.58 1.9 3.5/1 3.5 [(5/60)/2.50] x 100%-3.33% [(3/40)/3] x 100% - 2.5% [(10/40)/3.5] x 100% -7.14% 5 Times interest earned 11 Profit margin Gross profit ratio Return on total assets 10 12 13 Return on 14 common S/E equity Earnings per share Price-earnings per share 17 Dividend yield 15 16 2018 Koffee Corporation Financial Accounting II Case Study ACC 1175 The following are condensed financial statements of Koffee Corporation for the three years ended December 31, 2018, 2019, 2020. Koffee Corporation Comparative Balance Sheets For the years ending December 31 Current Assets 2020 2019 2018 Cash 47 32 Accounts Receivable 25 18 12 Less: Allowance for Doubtful 24 16 Accounts Inventories 54 38 Supplies 11 9 Total Current Assets 136 95 Capital Assets Less: Accumulated Depreciation 537 330 Total Assets 673 425 Current Liabilities Accounts Payable 80 12 Other Accrued Liabilities 30 13 Total Current Liabilities 110] 25 Long Term Notes Payable 60 60 Total Liabilities 170 85 Shareholders' Equity Common Shares 360 240 Retained Earnings 143 100 Total Shareholders' Equity 503 340 Total Liabilities and Shareholders' 673 425 Equity 634 97 2 IN 375 45 10 256 27 37 12 30 7 86 229 315 15 20 35 0 35 240 40 280 315 Koffee Corporation Comparative Income Statements For the years ending December 31 2020 2019 290 38 213 251 Sales Cost of Goods Sold Beginning Inventory Add: Purchases Less: Ending Inventory Cost of Goods Sold Gross Profit Less: Operating Expenses Net Income from Operations (IBIT) Interest Expense Income Before Income Tax Income Tax Net Income Balance, January 1 Add: Net Income for the Year Less: Dividend Balance, December 31 143 The following additional information is available: a. All sales are on credit; credit terms are net 60 days after invoice date. b. Number of shares of common stock were outstanding in 2018 Number of shares of common stock were outstanding in 2019 On January 1, 2020, 20 additional shares of common stock were sold. The total number of common stock outstanding is now 60 The additional 20 common shares were sold for a total of: c. Opening balance of accounts receivable on January 1, 2018 was d. Net capital assets for January 1, 2018, was e. Total assets on January 1, 2018, was f. Total shareholders equity on January 1, 2018, was g. In 2018, market price per share was In 2019, market price per share was In 2020, market price per share was 54 197 93 37 56 3 30 106 138 38 5 120 53 73 10 63 Koffee Corporation Comparative Statements of Retained Earnings For the Year Ended December 31 2020 2019 100 48 148 888 40 60 28282-3 16 310 250 3.5 210 2.5 100 110 24 76 3 63 103 100 2018 24 78 102 30 2018 150 72 78 30 41 1 47 I 10 2 213 21 50 ACC 1175 - Case Study Required: #1 Based on the information provided, calculate the following for each year. Show your work Formula 2020 2019 1 Current ratio 136/110-1.24:1 95/25-3.8:1 86/35-2.46:1 2 Quick ratio (47+24)/110 0.65:1 (32+16)/25 1.92:1 (37-12)/35-1.4:1 Accounts 3 receivable turnover 290/[(16-24)/2]-14.5 times 210/[(12-16))/2] 15 times 150/[(16-12)]/23 - 10.71 times (24/290) x 365-30.21 days (16/210) x 365-27.81 days (12/150) x 365-29.2 days 197/[(38+54)/2] - 4.28 times 100/[(30+38)/2] -2.94 times 72/[(24-30)/2] -2.66 times (54/197) x 365- 100.05 days (38/100) x 365 138.7 days (30/72) x 365 152.08 days 290/[(673+425)/2] -0.53 times 210/[(425-315)/2] -0.57 times 150/[(315-310)/2] -0.48 times (170/673) x 100%-25.26% (85/425) x 100% - 20% (35/315) x 100%-11.11% (503/673) x 100% 74.74% (340/425) x 100% - 80% (280/315) x 100%-88.89% 56/3-18.67 times 73/3-24.33 times 47/1-47 times (48/290) x 100%-16.55% (63/210) x 100%-30% (40/150) x 100% -26.67% (93/290) x 100% 32.07% (110/210) x 100% - 52.38% (78/150) x 100% 52% 48/[(425+673)/2] x 100% - 8.74% 63/[(315-425)/2] x 100%- 17.03% 40/[(310-315)/2] x 100% - 12.8% 48/[(340+503)/2] x 100% - 11.39% 63/[(280-340)/2] x 100%- 20.32% 40/[(250-280)/2] x 100% - 15.09% 48/60-50.80 63/40-1.58 40/40-1 2.50/.8-3.13 3/1.58 1.9 3.5/1-3.5 [(5/60)/2.50] x 100%-3.33% [(3/40)/3] x 100% - 2.5% [(10/40)/3.5] x 100% -7.14% Days sales uncollected Inventory turnover Days sales in inventory Total asset turnover 8 Debt ratio 9 Equity ratio 5 Times interest earned 11 Profit margin Gross profit ratio Return on total assets 10 12 13 Return on 14 common S/E equity Earnings per share Price-earnings per share 17 Dividend yield 15 16 2018 ACC 1175 - Case Study Required: #1 Based on the information provided, calculate the following for each year. Show your work Formula 2020 2019 1 Current ratio 136/110-1.24:1 95/25-3.8:1 86/35-2.46:1 2 Quick ratio (47-24)/110 0.65:1 (32+16)/25 1.92:1 (37-12)/35-1.4:1 Accounts 3 receivable turnover 290/[(16-24)/2]-14.5 times 210/[(12-16))/2] - 15 times 150/[(16-123/23-10.71 times Days sales uncollected (24/290) x 365-30.21 days (16/210) x 365-27.81 days (12/150) x 365-29.2 days Inventory turnover 197/[(38+54)/2] 4.28 times 100/[(30-38)/2] -2.94 times 72/[(24-30)/2] -2.66 times Days' sales in inventory (54/197) x 365- 100.05 days (38/100) x 365 138.7 days (30/72) x 365-152.08 days Total asset turnover 290/[(673+425)/2] -0.53 times 210/[(425-315)/2] -0.57 150/[(315-310)/2] -0.48 times times 8 Debt ratio (170/673) x 100% - 25.26% (85/425) x 100% - 20% (35/315) x 100%-11.11% 9 Equity ratio (503/673) x 100% - 74.74% (340/425) x 100% 80% (280/315) x 100% 88.89% 56/3-18.67 times 73/3-24.33 times 47/1-47 times (48/290) x 100%-16.55% (63/210) x 100% - 30% (40/150) x 100%-26.67% (93/290) x 100% = 32.07% (110/210) x 100% - 52.38% (78/150) x 100% -52% 48/((425+673)/2] x 100% - 8.74% 63/[(315+425)/2] x 100%- 17.03% 40/[(310-315)/2] x 100% - 12.8% 48/[(340+503)/2] x 100%- 11.39% 63/[(280-340)/2] x 100%- 20.32% 40/[(250-280)/2] x 100% - 15.09% 48/60-$0.80 63/40-1.58 40/40-1 2.50/.8-3.13 3/1.58 1.9 3.5/1 3.5 [(5/60)/2.50] x 100%-3.33% [(3/40)/3] x 100% - 2.5% [(10/40)/3.5] x 100% -7.14% 5 Times interest earned 11 Profit margin Gross profit ratio Return on total assets 10 12 13 Return on 14 common S/E equity Earnings per share Price-earnings per share 17 Dividend yield 15 16 2018

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