Question

Additional information: The net cash provided by operating activities for 2022 was $190,200. The cash used for capital expenditures was $91,000. The cash used for dividends was $30,200. The weighted-average common shares outstanding during the year was 50,000. (a) Compute the following values and ratios for 2022. (We provide the results from 2021 for comparative purposes.) (Round Current Ratio and Earnings per share to 2 decimal places, e.g. 15.25 and Debt to assets ratio to 1 decimal place, e.g. 78.9%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (i) Working capital. (2021: $160,500) (ii) Current ratio. (2021: 1.65:1) (iii) Free cash flow. (2021: $48,700) (iv) Debt to assets ratio. (2021: 31%) (v) Earnings per share. (2021: $3.15) (i) Working capital $enter a dollar amount (ii) Current ratio enter amount rounded to 2 decimal places :1 (iii) Free cash flow $enter a dollar amount (iv) Debt to assets ratio enter percentages rounded to 1 decimal place % (v) Earnings per share $enter a dollar amount rounded to 2 decimal places

The following are financial statements of Oriole Company.

Oriole Company Income Statement For the Year Ended December 31, 2022
Net sales		$2,229,500
Cost of goods sold		1,015,000
Selling and administrative expenses		910,000
Interest expense		78,000
Income tax expense		66,500
Net income		$ 160,000

Oriole Company Balance Sheet December 31, 2022
Assets
Current assets
Cash		$ 61,500
Debt investments		89,000
Accounts receivable (net)		169,100
Inventory		226,400
Total current assets		546,000
Plant assets (net)		575,000
Total assets		$ 1,121,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$ 150,000
Income taxes payable		32,000
Total current liabilities		182,000
Bonds payable		249,585
Total liabilities		431,585
Stockholders’ equity
Common stock		358,000
Retained earnings		331,415
Total stockholders’ equity		689,415
Total liabilities and stockholders’ equity		$1,121,000

Answer 1

Answer-i)- Working capital (Year 2022) =Current assets- Current liabilities

= $546000 - $182000

= $364000

ii)- Current Ratio (Year 2022)=Current Assets/ Current Liabilities

= $546000/$182000

= 3:1

iii)- Free cash flow (Year 2022) = $69000.

Explanation- Free cash flow = Net cash provided by operating activities- Capital expenditure - Cash dividends paid

= $190200 - $91000 - $30200

= $69000

iv)- Debt to Assets ratio (Year 2022) = (Total Liabilities/Total Assets)*100

= ($431585/$1121000)*100

= 38.5%

v)- Earnings per share = $3.2 per share.

Explanation- Earnings per share (Year 2022) = (Net Income – Preferred Dividends) / Weighted Average number of Common shares outstanding

= ($160000 - $0)/50000 shares

= $3.2 per share