Compute the financial ratios for Eastnorth Manufacturing’s industry. Using Eastnorth’s ratios from Problem 12, graph the firm’s and industry ratios as we have done in this chapter. Analyze Eastnorth’s performance in comparison to its industry.

Transcribed Image Text:

December 31 2017 2016 2015 A SSETS Cash and marketable securities $25,000 S20,000 $16,000 Accounts receivable 100,000 80,000 56,000 Inventories 125,000 100,000 80,000 Total current assets 250,000 200,000 152000 Gross plant and equipment 300,000 225,000 200,000 Less: accumulated depreciation -100,000 -75,000 -50,000 Net plant and equipment 200,000 150,000 150000 Land 50,000 50,000 50,000 Total fixed assets 250,000 200,000 200000 Total assets $500,000 $400,000 $352,000 LIABILITIES AND EQUITY Accounts payable $78,000 $65,000 $58,000 Notes payable 34,000 10,000 10,000 Accrued liabilities 30,000 25,000 25000 Total current liabilities 142,000 100,000 93,000 Long-term debt 140,000 100,000 71.00 Total liabilities $282,000 $200,000 $164,000 Common stock $50,000 $50,000 $50,000 ($1 par, 50,000 shares) Paid-in capital 100,000 100,000 100,000 Retained carnings 68,000 50,000 38,000 Total stockholders' equity 218,000 200,000 188000 Total liabilities and equity $500,000 $400,000 $352,000 Years Ended December 31 2017 2016 2015 Net revenues or sales $700,000 $60,000 $540,000 Cost of goods sold 450,000 375,000 338,000 Gross profit 250,000 225,000 202.000 Operating expenses: General and administrative 95,000 95,000 95000 Selling and marketing 56,000 50,000 45000 Depreciation 25,000 20,00 15000 Operating income 74,000 60,000 47,000 Interest 14,000 10,000 7,000 Income before taxes 60,000 50,000 40,000 Income taxes (40%) 24,000 20,000 16000 Net income $36,000 $30,000 $24,000 Number of shares outstanding 50,000 50,000 50,000 Earnings per share $0.72 $0.60 $0.48