1. The condensed financial statements of John Cully Company, for the years ended June 30, 2012 and 2011, are presented below.
John Cully Company
Balance Sheets
June 30
(in thousands)
Current assets
Cash and cash equivalents
$ 553.3
$ 611.6
Accounts receivable (net)
776.6
664.9
Inventory
768.3
653.5
Prepaid expenses and other current assets
204.4
269.2
Total current assets
2,302.6
2,199.2
Property, plant, and equipment (net)
694.2
647.0
Investments
12.3
12.6
Intangibles and other assets
876.7
849.3
Total assets
$3,885.8
$3,708.1
Liabilities and Stockholders' Equity
Current liabilities
$1,497.7
$1,322.0
Long-term liabilities
679.5
637.1
Stockholders' equity-common
1,708.6
1,749.0
Total liabilities and stockholders' equity
$3,885.8
$3,708.1
John Cully Company
Income Statements
For the Year Ended June 30
(in thousands)
2012
2011
Sales revenue
$6,336.3
$5,790.4
Costs and expenses
Cost of goods sold
1,617.4
1,476.3
Selling and administrative expenses
4,007.6
3,679.0
Interest expense
13.9
27.1
Total costs and expenses
5,638.9
5,182.4
Income before income taxes
697.4
608.0
Income tax expense
291.3
232.6
Net income
$ 406.1
$ 375.4
2. Compute the following ratios for 2012 and 2011.
(a)Current ratio.
(b) Inventory turnover. (Inventory on 6/30/10 was $599.0.)
(c)Profit margin ratio.
(d) Return on assets. (Assets on 6/30/10 were $3,349.9.)
(e) Return on common stockholders' equity. (Stockholders' equity on 6/30/10 was $1,795.9.)
(f)Debt to total assets ratio.
(g)Times interest earned.