Executive Summary of Wahlberg Company, accounting homework help

Write a 700- to 1,050-word Executive Summary using your solutions from P13-2.

Analyze the liquidity, solvency and profitability of Wahlberg Company.

Recommend with supporting points, whether the Company should be considered as an acquisition target.

Following your reference page, include an outline that you used to develop your summary

The comparative statements of Wahlberg Company are presented here.

Problem 13-A2

WAHLBERG COMPANY
Income Statements
For the Years Ended December 31
2017 2016
Net sales $1,890,540 $1,750,500
Cost of goods sold 1,058,540 1,006,000
Gross profit 832,000 744,500
Selling and administrative expenses 500,000 479,000
Income from operations 332,000 265,500
Other expenses and losses
Interest expense 22,000 20,000
Income before income taxes 310,000 245,500
Income tax expense 92,000 73,000
Net income $ 218,000 $ 172,500
WAHLBERG COMPANY
Balance Sheets
December 31
Assets 2017 2016
Current assets
Cash $ 60,100 $ 64,200
Debt investments (short-term) 74,000 50,000
Accounts receivable 117,800 102,800
Inventory 126,000 115,500
Total current assets 377,900 332,500
Plant assets (net) 649,000 520,300
Total assets $1,026,900 $852,800
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 160,000 $145,400
Income taxes payable 43,500 42,000
Total current liabilities 203,500 187,400
Bonds payable 220,000 200,000
Total liabilities 423,500 387,400
Stockholders’ equity
Common stock ($5 par) 290,000 300,000
Retained earnings 313,400 165,400
Total stockholders’ equity 603,400 465,400
Total liabilities and stockholders’ equity $1,026,900 $852,800

All sales were on account. Net cash provided by operating activities for 2017 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

Compute the following ratios for 2017. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%.)

 

(a) Earnings per share $Entry field with incorrect answer3.61
(b) Return on common stockholders’ equity Entry field with incorrect answer39.83 %
(c) Return on assets Entry field with incorrect answer22.26 %
(d) Current ratio Entry field with incorrect answer1.84 :1
(e) Accounts receivable turnover Entry field with incorrect answer16.73 times
(f) Average collection period Entry field with incorrect answer21.82 days
(g) Inventory turnover Entry field with incorrect answer8.71 times
(h) Days in inventory Entry field with incorrect answer41.91 days
(i) Times interest earned Entry field with incorrect answer14.24 times
(j) Asset turnover Entry field with incorrect answer1.98 times
(k) Debt to assets ratio Entry field with incorrect answer42.17 %
(l) Free cash flow $Entry field with incorrect answer28218