Question

Use the following selected financial information for Wilcox Corporation to answer questions 3-13. Show your calculations.

Wilcox Corporation

Income Statement

For the Year Ended December 31, 2015

Net sales                                              $2,870

Cost of goods sold                                 1,985

Gross profit                                         $   885

Operating expenses                                   620

Operating profit                                   $   265

Interest expense                                          40

Earnings before taxes                           $   225

Income tax expense                                    80

Net profit                                             $   145

Wilcox Corporation

Balance Sheet

December 31, 2015

Assets                                                            Liabilities and stockholders' equity

Current assets                                               Current liabilities

          Cash                                $ 25                       Accounts payable           $ 85

          Short-term investments       15                       Accrued liabilities              45

          Accounts receivable            70             Total current liabilities               130  

          Inventory                         150                       Long-term debt                240

Total current assets                     260             Total liabilities                            370                                                     

Long-term assets                                            Stockholders' equity

          Net PPE                           390                      Common stock and PIC     80

          Goodwill                           210                      Retained earnings           410   

                                                                      Total stockholders' equity          490   

Total assets                                $860            Total liabilities and equity        $860

WilcoxCorporation

Statement of Cash Flow Information

For the Year Ended December 31, 2015

Cash from operating activities                        $150

Investing activities:

          Capital expenditures                            $ 60

          Acquisitions                                         $ 10

Financing activities:                                      

          Proceeds from long-term borrowing    $ 50

          Payments on long-term borrowing      $ 25

          Payments of cash dividends                 $ 20

Cash paid for interest                                     $ 10

Cash paid for income taxes                            $ 75

1. Wilcox’s quick ratio is:

2. Wilcox’s average collection period is:

3. Wilcox’s days payable outstanding is:

4. Wilcox’s total asset turnover ratio is:

5. Wilcox’s times interest earned ratio is:

6. Wilcox’s cash flow adequacy ratio is:

7. Wilcox’s cash flow margin is:

8. Wilcox’s effective tax rate is:

9. Wilcox’s debt ratio is:

10. Wilcox’s return on equity is:

11. Wilcox’s Net Operating Assets is:

PLEASE SHOW YOUR CALCULATIONS!!!

Answer 1