Refer to the financial statements for Richardson Socks Company in Problem 12-89B and the data below.

Data from problem 12-89B,

Richardson Socks Company

Consolidated Income Statements

(In thousands except per share data)

Richardson Socks Company
Consolidated Balance Sheets
(In thousands)

Required:
1. Prepare all the financial ratios for Richardson for 2019 and 2018 (using percentage terms where appropriate and rounding all answers to two decimal places).
2. Indicate whether Richardson's short-term liquidity is adequate.
3. Discuss whether Richardson uses its assets efficiently.
4. Determine whether Richardson is profitable.
5. Discuss whether long-term creditors should regard Richardson as a high-risk or a low-risk firm.
6. Perform a Dupont analysis (rounding to two decimal places) for 2019 and 2018?

Transcribed Image Text:

Year ended December 31, 2018 2019 2017 Revenues Costs and expenses: Cost of goods sold Selling and administrative $4,102,721 $3,652,412 $3,178,569 $1,952,123 598,236 31,853 $2,256,236 $2,234,985 653,986 32,596 927,412 23,974 1,925 $3,209,547 $ 893,174 Interest Other expenses (income) Total costs and expenses Income before income taxes Income taxes Net income (102) $2,582,110 $ 596,459 2,254 $2,923,821 $ 728,591 183,456 $ 545,135 247,692 $ 645,482 163,524 $ 432,935 December 31, 2019 ASSETS 2018 Current assets: Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $20,568 and $18,322 Inventories $ 301,695 $ 269,648 670,469 601,396 604,236 469,582