Danifield Inc Comparative Income Statement December 31, 2012 and 2011 Net Sales Cost of goods sold...

 

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Danifield Inc Comparative Income Statement December 31, 2012 and 2011 Net Sales Cost of goods sold Gross Profit Operating Expenses Income from operations Interest Expense Income before tax Income tax expense Net Income Danifield Inc Comparative Balance Sheet December 31, 2012 and 2011 Current Assets Cash Receivables, net Inventories Prepaid expenses 2012 2011 $ 428,000.00 $218,000.00 $ 210,000.00 $ 136,000.00 $134,000.00 $ 94,000.00 $ 76,000.00 $467,000.00 $ 237,000.00 $ 230,000.00 $ 9,000.00 $ 10,000.00 $ 85,000.00 $ 66,000.00 $ 24,000.00 $ 27,000.00 $ 61,000.00 $ 39,000.00 2012 2011 $ 97,000.00 $ 95,000.00 $112,000.00 2010 $ 118,000.00 $102,000.00 $ 145,000.00 $ 12,000.00 $ 5,000.00 $ 163,000.00 $203,000.00 Danifield Inc Comparative Balance Sheet December 31, 2012 and 2011 Current Assets Cash Receivables, net Inventories Prepaid expenses Total Current Assets Property, plant & equipment Total Assets Total Current Liabilities Long term liabilities Total Liabilities Preferred Stock, 3% Common stockholder's equity, no par Total Liabilities & Equity 2012 2011 $ 97,000.00 $ 95,000.00 $112,000.00 $118,000.00 $102,000.00 $225,000.00 $ 114,000.00 $ 339,000.00 2010 $ 145,000.00 $ 163,000.00 $203,000.00 $ 12,000.00 $ 5,000.00 $366,000.00 $381,000.00 $ 211,000.00 $179,000.00 $577,000.00 $ 560,000.00 $598,000.00 $ 246,000.00 $ 97,000.00 $ 343,000.00 $ 108,000.00 $ 108,000.00 $ 130,000.00 $ 109,000.00 $ 85,000.00 $577,000.00 $ 560,000.00 1. Market price of Danifield's common stock: $86.58 at December 31, 2012 and $46.54 at December 31, 2011 2. Common shares outstanding: 12, 0000 during 2012 and 10,000 during 2011 and 2010 3. All sales on credit Requirements: 1. Compute the following ratios for 2012 and 2011: [ 16 marks] a. Current ratio b. Times interest earned ratio c. Inventory turnover d. Gross profit percentage e. Debt to Equity ratio f. Rate of return on stockholder's equity Earnings per share of common stock g. h. Price/Earnings ratio 2. Decide (a) whether Danifield's ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of the common stock appears to have increased or decreased. [ 4 marks] 3. What are some red flags that should be considered to determine if a company is in financial trouble? [ 5 marks] Danifield Inc Comparative Income Statement December 31, 2012 and 2011 Net Sales Cost of goods sold Gross Profit Operating Expenses Income from operations Interest Expense Income before tax Income tax expense Net Income Danifield Inc Comparative Balance Sheet December 31, 2012 and 2011 Current Assets Cash Receivables, net Inventories Prepaid expenses 2012 2011 $ 428,000.00 $218,000.00 $ 210,000.00 $ 136,000.00 $134,000.00 $ 94,000.00 $ 76,000.00 $467,000.00 $ 237,000.00 $ 230,000.00 $ 9,000.00 $ 10,000.00 $ 85,000.00 $ 66,000.00 $ 24,000.00 $ 27,000.00 $ 61,000.00 $ 39,000.00 2012 2011 $ 97,000.00 $ 95,000.00 $112,000.00 2010 $ 118,000.00 $102,000.00 $ 145,000.00 $ 12,000.00 $ 5,000.00 $ 163,000.00 $203,000.00 Danifield Inc Comparative Balance Sheet December 31, 2012 and 2011 Current Assets Cash Receivables, net Inventories Prepaid expenses Total Current Assets Property, plant & equipment Total Assets Total Current Liabilities Long term liabilities Total Liabilities Preferred Stock, 3% Common stockholder's equity, no par Total Liabilities & Equity 2012 2011 $ 97,000.00 $ 95,000.00 $112,000.00 $118,000.00 $102,000.00 $225,000.00 $ 114,000.00 $ 339,000.00 2010 $ 145,000.00 $ 163,000.00 $203,000.00 $ 12,000.00 $ 5,000.00 $366,000.00 $381,000.00 $ 211,000.00 $179,000.00 $577,000.00 $ 560,000.00 $598,000.00 $ 246,000.00 $ 97,000.00 $ 343,000.00 $ 108,000.00 $ 108,000.00 $ 130,000.00 $ 109,000.00 $ 85,000.00 $577,000.00 $ 560,000.00 1. Market price of Danifield's common stock: $86.58 at December 31, 2012 and $46.54 at December 31, 2011 2. Common shares outstanding: 12, 0000 during 2012 and 10,000 during 2011 and 2010 3. All sales on credit Requirements: 1. Compute the following ratios for 2012 and 2011: [ 16 marks] a. Current ratio b. Times interest earned ratio c. Inventory turnover d. Gross profit percentage e. Debt to Equity ratio f. Rate of return on stockholder's equity Earnings per share of common stock g. h. Price/Earnings ratio 2. Decide (a) whether Danifield's ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of the common stock appears to have increased or decreased. [ 4 marks] 3. What are some red flags that should be considered to determine if a company is in financial trouble? [ 5 marks]

Answer rating: 100% (QA)

Lets compute the requested ratios for Danifield Inc for the years 2012 and 2011 2012 Current Assets Cash 97000 Receivables net 112000 Inventories 1450... View the full answer