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Oriole Company has these comparative balance sheet data:
Oriole Company
Balance Sheets
December 31
2025
2024
Cash
$18,500
$37,000
Accounts receivable (net)
71,000
50,000
Inventory
55,000
49,000
Plant assets (net)
240,000
225,000
$384,500
$361,000
Accounts payable
$44,000
$53,000
Bonds payable (15%)
140,000
140,000
Common stock, $10 par
144,000
128,000
Retained earnings
56,500
40,000
$384,500
$361,000
Additional information for 2025:
1.
Net income was $30,000.
2.
Sales on account were $400,000. Sales returns and allowances amounted to $22,000.
3.
Cost of goods sold was $210,000.
4.
Net cash provided by operating activities was $50,000.
5.
Capital expenditures were $20,000, and cash dividends paid were $13,500.
6.
The bonds payable are due in 2038.
Compute the following ratios at December 31, 2025. ((RRoouunndd ccuurrre
renntt ra
rattiioo aanndd iinve
nvennttoorryy ttuurrnnoove
verr ttoo 22
ddeecciim
maall ppllaacceess,, ee..gg.. 11..8833 aanndd aallll ootthheerr aannssw
weerrss ttoo 11 ddeecciim
maall ppllaaccee,, ee..gg.. 11..88.. U
Ussee 336655 ddaayyss ffoorr
ccaallccuullaattiioonn..))
a.
Current ratio
:1
b.
Accounts receivable turnover
times
c.
Average collection period
days
d.
Inventory turnover
times
e.
Days in inventory
days
f.
Free cash flow
$
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Week 8: Homework
Question 3 of 5
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Selected hypothetical comparative statement data for the giant bookseller Barnes & Noble are presented here. All
balance sheet data are as of the end of the fiscal year (in millions).
2025
2024
Net sales
$5,150.4
$4,900.0
Cost of goods sold
3,800.8
4,101.0
Net income
55.0
170.7
Accounts receivable (net)
65.0
103.3
Inventory
1,250.1
1,250.0
Total assets
2,850.0
3,250.1
900.2
1,060.1
Total common stockholders’ equity
Compute the following ratios for 2025. ((RRoouunndd aasssseett ttuurrnnoove
verr ttoo 22 ddeecciim
maall ppllaacceess,, ee..gg 11..8833 aanndd aallll ootthheerr
aannssw
weerrss ttoo 11 ddeecciim
maall ppllaaccee,, ee..gg.. 11..88 oorr 22..55%
%))
a.
Profit margin
%
b.
Asset turnover
times
c.
Return on assets
%
d.
Return on common stockholders’ equity
%
e.
Gross profit rate
%
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Here is the income statement for Cullumber, Inc.
Cullumber, Inc.
Income Statement
For the Year Ended December 31, 2025
Net sales
$426,500
Cost of goods sold
215,400
Gross profit
211,100
Expenses (including $11,400 interest and $28,100 income taxes)
83,500
$127,600
Net income
Additional information:
1.
Common stock outstanding January 1, 2025, was 27,600 shares, and 35,100 shares were outstanding at
December 31, 2025. (Use a simple average for weighted-average.)
2.
The market price of Cullumber stock was $13 on December 31, 2025.
3.
Cash dividends of $23,600 were declared and paid.
Compute the following measures for 2025. ((RRoouunndd EEaarrnniinnggss ppeerr sshhaare
re ttoo 22 ddeecciim
maall ppllaacceess,, ee..gg.. 11..8833 aanndd aallll
ootthheerr aannssw
weerrss ttoo 11 ddeecciim
maall ppllaaccee,, ee..gg.. 11..88 oorr 22..55%
%..))
$
a.
Earnings per share
b.
Price-earnings ratio
times
c.
Payout ratio
%
d.
Times interest earned
times
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The comparative statements of Blossom Company are presented here.
Blossom Company
Income Statements
For the Years Ended December 31
2025
2024
Net sales
$1,919,400
$1,785,000
Cost of goods sold
1,067,000
1,046,240
Gross profit
852,400
738,760
Selling and administrative expenses
520,000
498,160
Income from operations
332,400
240,600
Interest expense
22,880
20,800
Income before income taxes
309,520
219,800
Income tax expense
92,856
65,940
$216,664
$153,860
Other expenses and losses
Net income
Blossom Company
Balance Sheets
December 31
2025
2024
Cash
$62,504
$66,768
Debt investments (short-term)
76,960
52,000
Accounts receivable (net)
122,512
106,912
Inventory
131,040
120,120
Total current assets
393,016
345,800
674,960
541,112
$1,067,976
$886,912
$166,400
$151,216
Income taxes payable
45,240
43,680
Total current liabilities
211,640
194,896
228,800
208,000
440,440
402,896
Common stock ($4 par)
301,600
312,000
Retained earnings
325,936
172,016
Total stockholders’ equity
627,536
484,016
$1,067,976
$886,912
Assets
Current assets
Plant assets (net)
Total assets
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable
Bonds payable
Total liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
All sales were on credit. Net cash provided by operating activities for 2025 was $228,800. Capital expenditures were
$141,440, and cash dividends paid were $62,744.
Compute the following ratios for 2025. ((RRoouunndd D
Deebbtt ttoo aasssseett ra
rattiioo aanndd Fre
Freee ccaasshh flfloow
w ttoo 00 ddeecciim
maall ppllaacceess,,
ee..gg.. 1155 oorr 1155%
%,, EEaarrnniinnggss ppeerr sshhaare
re,, RReettuurrnn oonn aasssseettss,, C
Cuurrre
renntt ra
rattiioo aanndd A
Asssseett ttuurrnnoove
verr ttoo 22 ddeecciim
maall
ppllaacceess,, ee..gg.. 11..8833 oorr 11..8833%
% aanndd aallll ootthheerr aannssw
weerrss ttoo 11 ddeecciim
maall ppllaaccee,, ee..gg.. 11..88 oorr 11..88%
%.. U
Ussee 336655 ddaayyss
ffoorr ccaallccuullaattiioonnss..))
$
a.
Earnings per share
b.
Return on common stockholders’ equity
%
c.
Return on assets
%
d.
Current ratio
:1
e.
Accounts receivable turnover
times
f.
Average collection period
days
g.
Inventory turnover
times
h.
Days in inventory
days
i.
Times interest earned
times
j.
Asset turnover
times
k.
Debt to assets ratio
%
l.
Free cash flow
$
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