The following financial data are taken from the records of Emily Kate Company. Emily Kate Company
Comparative Balance Sheet
December 31, 2020
Assets: 2020 2019
Cash $ 4,000 $ 6,000
Accounts receivable $ 16,000 $14,000
Inventory $ 40,000 $ 20,000
Property, plant, and equipment $ 100,000 $100,000
Other assets $ 16,000 $ 20,000
Total assets $ 176,000 $160,000
Liabilities and stockholders’ equity:
Current liabilities $ 44,000 $ 50,000
Long-term liabilities $ 24,000 $ 10,000
Paid-in capital $ 60,000 $ 60,000
Retained earnings $ 48,000 $ 40,000
Total liabilities and stockholders’ equity $176,000 $160,000
Emily Kate Company
Comparative Income Statement
For the Years Ended December 31, 2020
Sales $ 580,000 $ 410,000
Cost of goods sold $ 245,000 $ 185,000
Gross Profit $ 335,000 $ 225,000
Operating expenses $ 145,000 $ 133,000
Interest expense $ 12,000 $ 9,000
Income tax expense $ 56,000 $ 35,000
Net income $ 122,000 $ 48,000
Required:
1. Compute the following ratios for 2019 and 2020:
a. Current ratio
b. Debt ratio
c. Total Asset turnover
d. Return on assets
e. Return on equity