Griffin Company
Statement of Financial Position
12/31/12 12/31/11
Assets
Cash $ 40,000 $ 10,000
Accounts Receivable $ 30,000 $ 55,000
Inventory $110,000 $ 70,000
Property, plant and equipment $250,000 $257,000
Total Assets $430,000 $392,000
Liabilities and Stockholder’s Equity
Current liabilities $ 60,000 $ 50,000
5% morgage payable $120,000 $162,000
Common stock (30,000 shares) $150,000 $150,000
Retained earnings $100,000 $ 30,000
Total Liabilities and stockholders’ equity $430,000 $392,000
Griffin Company
Income Statement For the Year Ended December 31, 2012
Sales on account $420,000
Less expenses:
Cost of goods sold $214,000
Salary expense $ 50,000
Depreciation expnese $ 7,000
Interest expense $ 9,000
Total expenses $280,000
Income before taxes $140,000
Income tax expense (50%) $ 70,000
Net income $ 70,000
Compute the following rations for the Griffin Company for the year ending December 31, 2012:
A. Profit margin ration (before interest and taxes)
B. Total asset turnover
C. Rate of return on total assets
D. Rate of return on common stockholders’ equity
E. Earnings per share of stock
F. Inventory turnover
G. Current ratio
H. Quick ratio
I. Accounts receivable turnover
J. Debt-to-equity ratio
K. Times interest earned
In addition to calculating and provided answers letters A through K, answer the following questions:
1) What conclusions can you draw regarding this company’s performance?;
2) Do you believe you have enough information to make a thorough analysis? Take into considerations the benefits of trend analysis.
