The 2014 and 2015 financial statements of Ken's Sportswear follow:

a. Compute all relevant ratios for 2015.
b. Prepare common-size financial statements.
c. Evaluate the company's financial performance and condition.

Transcribed Image Text:

Balance Sheet Assets Cash Accounts receivable Inventory Long-lived assets (net) Total assets Liabilities and Shareholders' Equity Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equity Income Statement Sales (all on credit) Less: Cost of goods sold Gross profit Operating expenses Net income from operations Interest expense Net income before taxes Income taxes Net income Dividends Per-share market price Outstanding common shares 2015 2014 9,000 12,000 18,000 60,000 $99,000 $7,000 9,000 15,000 50,000 $81,000 $16,500 46,000 20,000 5,000 11,500 $99,000 $12,000 40,000 20,000 5,000 4,000 $81,000 $72,000 30,000 $42,000 12,000 $30,000 5,000 $25,000 8,500 16,500 9,000 $ 36 2,000 $30 2,000