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.
Step by Step Answer:
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald