The following information (in $000) has been obtained from Sandhill Limiteds financial statements for the fiscal years
Question:
The following information (in $000) has been obtained from Sandhill Limited’s financial statements for the fiscal years ended December 31.
| 2020 | 2019 | 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|
Total assets | $735 | $587 | $517 | ||||||
Current liabilities | 93 | 89 | 94 | ||||||
Total liabilities | 240 | 170 | 164 | ||||||
Total shareholders’ equity | 495 | 426 | 410 | ||||||
Income before taxes | 87 | 66 | 44 | ||||||
Interest expense | 10 | 6 | 5 | ||||||
Net cash provided by operating activities | 123 | 105 | 104 | ||||||
Net income | 60 | 54 | 58 | ||||||
Capital expenditures for the year | 30 | 20 | 15 | ||||||
Number of common shares outstanding | 65 | 65 | 65 | ||||||
Taken from stock market at Dec. 31 | $16.50 | $12.34 | $12.20 | ||||||
There were no preferred shares issued by Sandhill nor were there any dividends paid in any of the three years.
Calculate the following items for Sandhill Limited. (Round price earnings ratio, times interest earned ratio and free cash flow to operating cash flows answers to 1 decimal place, e.g. 52.7 and other answers to 2 decimal places, e.g. 52.75.)
| 2019 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|
| 1. | Current cash debt coverage ratio for fiscal years 2019 and 2020. | times | times | |||||
| 2. | Cash debt coverage ratio for fiscal years 2019 and 2020. | times | times | |||||
| 3. | Earnings per share for fiscal years 2019 and 2020. | |||||||
| 4. | Price earnings ratio for fiscal years 2019 and 2020. | times | times | |||||
| 5. | Times interest earned ratio for fiscal years 2019 and 2020. | times | times | |||||
| 6. | Free cash flow to operating cash flows for fiscal years 2019 and 2020. | % | % | |||||
Comment on whether there has been improvement or deterioration from 2019 to 2020 in the six ratios calculated. Take the perspective of Sandhill’s management.
| 1. | Current cash debt coverage ratio for fiscal years 2019 and 2020. | select an option Deteriorated or Improved | ||
|---|---|---|---|---|
| 2. | Cash debt coverage ratio for fiscal years 2019 and 2020. | select an option Deteriorated or Sightly Improved | ||
| 3. | Earnings per share for fiscal years 2019 and 2020. | select an option Deteriorated or Improved | ||
| 4. | Price earnings ratio for fiscal years 2019 and 2020. | select an option Deteriorated or Improved | ||
| 5. | Times interest earned ratio for fiscal years 2019 and 2020. | select an option Improved or Deteriorated | ||
| 6. | Free cash flow to operating cash flows for fiscal years 2019 and 2020 | select an option Improved or Deteriorated |
Expert Answer:
Answer Ratios 1 Current cash debt coverage ratioNet cash provided by operating activitiesAverage cur... View the full answer
