Manonta Sales Companys summary statement of financial position and income statement as at December 31, 2015, follow.

Question:

Manonta Sales Company’s summary statement of financial position and income statement as at December 31, 2015, follow.

Statement of Financial Position (in thousands)

Current assets........... $150,000

Net property, plant, and equipment.. 75,000

Total assets............ $225,000

Current liabilities........... $ 95,000

Long-term debt........... 90,000

Shareholders’ equity........ 40,000

Total liabilities and shareholders’ equity.. $225,000

Statement of Income (in thousands)

Sales revenue .............$460,000

Cost of goods sold, operating, and other expenses 420,000

Income before income taxes........ 40,000

Income taxes............. 14,000

Net income............... $ 26,000

Earnings per share............. $ 1.30

Required:

Based on the information available, should you keep the shares or sell them? Support your answer with a detailed analysis.

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Related Book For  book-img-for-question

Understanding Financial Accounting

ISBN: 978-1118849385

1st Canadian Edition

Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald

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