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.
For the Years Ended December 31
|Cost of goods sold||1,058,540||1,006,000|
|Selling and administrative expenses||500,000||479,000|
|Income from operations||332,000||265,500|
|Other expenses and losses|
|Income before income taxes||310,000||245,500|
|Income tax expense||92,000||73,000|
|Net income||$ 218,000||$ 172,500|
|Cash||$ 60,100||$ 64,200|
|Debt investments (short-term)||74,000||50,000|
|Total current assets||377,900||332,500|
|Plant assets (net)||649,000||520,300|
|Liabilities and Stockholders’ Equity|
|Accounts payable||$ 160,000||$145,400|
|Income taxes payable||43,500||42,000|
|Total current liabilities||203,500||187,400|
|Common stock ($5 par)||290,000||300,000|
|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||$3.61|
|(b)||Return on common stockholders’ equity||39.83||%|
|(c)||Return on assets||22.26||%|
|(e)||Accounts receivable turnover||16.73||times|
|(f)||Average collection period||21.82||days|
|(h)||Days in inventory||41.91||days|
|(i)||Times interest earned||14.24||times|
|(k)||Debt to assets ratio||42.17||%|
|(l)||Free cash flow||$28218|