comparative financial statements of Blige Inc.

| May 22, 2015

he comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $63 on December 31, 2012.

Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2012 and 2011
    2012     2011
Retained earnings, January 1 $1,262,100 $1,067,600
Add net income for year 300,000 218,700
Total $1,562,100 $1,286,300
Deduct dividends:
On preferred stock $9,800 $9,800
On common stock 14,400 14,400
Total $24,200 $24,200
Retained earnings, December 31 $1,537,900 $1,262,100
Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2012 and 2011
    2012     2011
Sales $1,787,170 $1,644,200
Sales returns and allowances 8,890 5,780
Net sales $1,778,280 $1,638,420
Cost of goods sold 613,200 564,140
Gross profit $1,165,080 $1,074,280
Selling expenses $392,700 $490,010
Administrative expenses 334,530 287,790
Total operating expenses 727,230 777,800
Income from operations $437,850 $296,480
Other income 23,050 18,920
$460,900 $315,400
Other expense (interest) 120,000 66,400
Income before income tax $340,900 $249,000
Income tax expense 40,900 30,300
Net income $300,000 $218,700
Blige Inc.
Comparative Balance Sheet
December 31, 2012 and 2011
    Dec. 31, 2012     Dec. 31, 2011
Assets
Current assets:
Cash $288,770 $300,730
Temporary investments 437,050 498,350
Accounts receivable (net) 328,500 306,600
Inventories 248,200 189,800
Prepaid expenses 54,632 60,150
Total current assets $1,357,152 $1,355,630
Long-term investments 754,858 195,781
Property, plant, and equipment (net) 1,950,000 1,755,000
Total assets $4,062,010 $3,306,411
Liabilities
Current liabilities $424,110 $614,311
Long-term liabilities:
Mortgage note payable, 8%, due 2017 $670,000 $0
Bonds payable, 8%, due 2021 830,000 830,000
Total long-term liabilities $1,500,000 $830,000
Total liabilities $1,924,110 $1,444,311
Stockholders’ Equity
Preferred $0.70 stock, $20 par $280,000 $280,000
Common stock, $10 par 320,000 320,000
Retained earnings 1,537,900 1,262,100
Total stockholders’ equity $2,137,900 $1,862,100
Total liabilities and stockholders’ equity $4,062,010 $3,306,411

Instructions:

Determine the following measures for 2012, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Assume 365 days a year.

1. Working capital: $
2. Current ratio:
3. Quick ratio:
4. Accounts receivable turnover:
5. Number of days’ sales in receivables:
6. Inventory turnover:
7. Number of days’ sales in inventory:
8. Ratio of fixed assets to long-term liabilities:
9. Ratio of liabilities to stockholders’ equity:
10. Number of times interest charges are earned:
11. Number of times preferred dividends earned:
12. Ratio of net sales to assets:
13. Rate earned on total assets: %
14. Rate earned on stockholders’ equity: %
15. Rate earned on common stockholders’ equity: %
16. Earnings per share on common stock: $
17. Price-earnings ratio:
18. Dividends per share of common stock: $
19. Dividend yield: %

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Net Present Value
Stock Homework

Category: Finance

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