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Problem 13-24A Ratio analysis LO 13-2, 13-3, 13-4, 13-5 Financial statements for Baird Company follow. BAIRD COMPANY Balance Sheets As of December 31 2019 2018 $ 17,000 20,200 43,000 128,000 27,000 235,200 32,000 265,000 28,000 $560,200 $ 13,00 6,200 35,000 136,000 12,000 202,200 25,000 250,000 23,000 $500,200 Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable Other Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock, (par value $10, 45 cumulative, non-participating: 7,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized: 10,800 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 18,800 113,800 23,000 155,600 $ 12,500 100,000 17.000 129,500 120,000 26,000 146,000 301,600 120,000 21,000 141,000 270,500 70,000 70,000 118,600 258,600 $560,200 70,000 70,000 89,700 229,700 $500,200 ved Help Save & Exit 301,600 270,5ee Total liabilities Stockholders' equity Preferred stock, par value $1e, 4 cumulative, non-participating: 7.000 shares authorized and issued) Common stock (no par: 50,000 shares authorized; 10,000 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 70,000 70,000 118,600 258,600 $560,220 70,000 70,000 89,700 229, 700 $500,200 2018 $230,000 5,400 235,400 BAIRD COMPANY Statements of Incone and Retained Earnings For the Years Ended December 31 2019 Revenues Sales (net) $250,000 Other revenues 8,400 Total revenues 258,400 Expenses Cost of goods sold 125,000 Selling, general, and administrative 57,000 Interest expense 8,600 Income tax expense 33,000 Total expenses 223,600 Net earnings (net income) 34,800 Retained earnings, January 1 89,700 Less: Preferred stock dividends 2,800 Common stock dividends 3,100 Retained earnings, December 31 $118,600 109,000 52,800 7,800 32,000 200,800 34,600 61,000 2,800 3,100 $ 89,700 Required Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet. a. Working capital b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, 2018, were $36,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts recevable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, 2018, was $142,000). (Round your answers to 2 decimal places.) Income tax expense Total expenses Net earnings (net income) Retained earnings, January 1 Less: Preferred stock dividends Common stock dividends Retained earnings, December 31 33,000 223,600 34,800 89,700 2,800 3,100 $118,600 32,000 200,800 34,600 61,000 2,800 3,100 $ 89,700 Required Calculate the following ratios for 2019 and 2018. Since 2017 numbers are not presented do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet. a. Working capital b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, 2018, were $36,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, 2018, was $142,000). (Round your answers to 2 decimal places.) 9. Number of days to sell inventory. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt to assets ratio. (Round your answers to the nearest whole percent.) I. Debt to equity ratio. (Round your answers to 2 decimal places.) J. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) I. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets. (Round your answers to 2 decimal places.) n. Return on investment. (Round your answers to 2 decimal places.) o. Return on equity. (Round your answers to 2 decimal places.) p. Earnings per share. (Round your answers to 2 decimal places.) 4. Book value per share of common stock. (Round your answers to 2 decimal places.) I. Price earnings ratio (market price per share: 2018. $11.85; 2019, $12.70). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) 2019 $ $ . Working capital b. Current ratio 79,600 1.51 2018 72,700 1,56 Test 0 Saved Help Save & Exit h. Debt to assets ratio. (Round your answers to the nearest whole percent.) i. Debt to equity ratio. (Round your answers to 2 decimal places.) J. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) 1. Net margin (Round your answers to 2 decimal places.) m. Turnover of assets. (Round your answers to 2 decimal places.) n. Return on investment. (Round your answers to 2 decimal places.) o. Return on equity. (Round your answers to 2 decimal places.) p. Earnings per share. (Round your answers to 2 decimal places.) 4. Book value per share of common stock. (Round your answers to 2 decimal places.) 1. Price-eamings ratio (market price per share: 2018, $11.85: 2019, $1270). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) $ $ 2019 79,600 1.51 0.52 56.94 times days times days % 2018 72,700 1.56 0.42 56.54 times days times days % times times a. Working capital b. Current ratio c. Quick ratio d. Receivables turnover e. Average days to collect accounts receivable + Inventory turnover 9 Average days to sell inventory h. Debt to assets ratio Debt to equity ratio 1 Number of times interest oamned k Plant assets to long-term debt 1. Net margin m. Asset turnover n. Return on investment 0. Return on equity p. Earnings per sharo 9. Book value per share Price-eamings ratio s Dividend yield % % % % per share per share per share per share % %

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