01 Jul Executive Summary of Wahlberg Company, accounting homework help
Question Description
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
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