The Sleep Company had the following operating results for 2021-2022. In addition, the company paid dividends in
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The Sleep Company had the following operating results for 2021-2022. In addition, the company paid dividends in both 2021 and 2022 of $61,800 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2021 was $8 and $7 in 2022. The industry average earnings multiple for the mattress industry was 9 in 2022 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,000,000 shares of outstanding stock at the end of 2022.
Balance Sheet, December 31, | ||
2022 | 2021 | |
---|---|---|
Cash | $ 346,000 | $ 106,000 |
Accounts Receivable | $ 356,000 | $ 406,000 |
Inventory | $ 256,000 | $ 306,000 |
Total Current Assets | $ 958,000 | $ 818,000 |
Long-lived Assets | 1,140,000 | 1,160,000 |
Total Assets | $ 2,098,000 | $ 1,978,000 |
Current Liabilities | $ 206,000 | $ 306,000 |
Long-term Debt | 606,000 | 506,000 |
Shareholder Equity | 1,286,000 | 1,166,000 |
Total Debt and Equity | $ 2,098,000 | $ 1,978,000 |
Income Statement, for year ended December 31, | ||
2022 | 2021 | |
---|---|---|
Sales | $ 4,780,000 | $ 4,530,000 |
Cost of Sales | 4,124,000 | 4,024,000 |
Gross Margin | 656,000 | 506,000 |
Operating Expenses | 353,000 | 403,000 |
Operating Income | 303,000 | 103,000 |
Taxes | 121,200 | 41,200 |
Net Income | $ 181,800 | $ 61,800 |
Cash Flow From Operations | 2022 | 2021 |
---|---|---|
Net Income | $ 181,800 | $ 61,800 |
Plus Depreciation Expense | 50,000 | 50,000 |
+ Decrease (-increase) in Accounts Receivable and Inventory | 100,000 | 0 |
+ Increase (-decrease) in Current Liabilities | (-100,000) | 0 |
Cash Flow from Operations | $ 231,800 | $ 111,800 |
The current ratio for 2022 is (rounded):
Multiple Choice
1.8
2.0
3.9
4.7
2.5
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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