Refer to Steele's financial statements in Exercise 12-76.

Refer to exercise 12-76,

Steele Inc.

Consolidated Income Statements

(In thousands except per share amounts)

Steele Inc.
Consolidated Balance Sheets
(In thousands)

Required:

1. Compute the five debt management ratios for 2018 and 2019 (rounded to two decimal places).

2. CONCEPTUAL CONNECTION Indicate whether the ratios have changed and whether the ratios suggest that Steele is more or less risky for long-term creditors at December 31, 2019, than at December 31, 2018.

Transcribed Image Text:

2019 2018 2017 $ 6,149,218 (4,355,675) $ 1,793,543 Net sales Cost of goods sold Gross margin General and administrative $7,245,088 (5,286,253) $ 1,958,835 $6,944,296 (4,953,556) $ 1,990,740 (1,259,896) 2,617 $ 701,556 (63,685) 7,308 (1,202,042) (1,080,843) expenses Special and nonrecurring items Operating income Interest expense Other income Gain on sale of investments $ 788,698 (62,398) 10,080 9,117 $ 745,497 (290,000) $ 455,497 $ 712,700 (63,927) 11,529 $ 645,179 (254,000) $ 391,179 $ 660,302 (257,000) 403,302 Income before income taxes Provision for income taxes Net income ASSETS Dec. 31, 2019 Dec. 31, 2018 Current assets: Cash and equivalents Accounts receivable $ 320,558 1,056,911 $ 41,235 837,377 803,707 Inventories Other Total current assets Property and equipment, net Other assets Total assets 733,700 109,456 $2,220,625 1,666,588 247,892 101,811 $1,784,130 1,813,948 248,372 $4,135,105 $3,846,450