Question

SHERIDAN COMPANY SHERIDAN COMPANY Income Statements For the Years Ended December 31 2022 2021Sales revenue $896,000 $796,000 Cost of goods sold 648,000 574,000 Gross profit 248,000 222,000 Operating expenses 189,000 165,000 Net income $ 59,000 $ 57,000 Additional information: 1. Inventory at the beginning of 2021 was $115,000. 2. Accounts receivable (net) at the beginning of 2021 were $88,000. 3. Total assets at the beginning of 2021 were $639,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account.

Answer 1

current ratio = current assets / current liabilities

2022 = $482,000 / $106,000 = 4.55

2021 = $387,000 / $91,000 = 4.25

accounts receivable turnover = net sales / average accounts receivable

2022 = $896,000 / $97,500 = 9.19

2021 = $796,000 / $89,500 = 8.89

inventory turnover = COGS / average inventory

2022 = $648,000 / $197,500 = 3.28

2021 = $574,000 / $140,000 = 4.1

profit margin = net income / total sales

2022 = $59,000 / $896,000 = 6.58%

2021 = $57,000 / $796,000 = 7.16%

asset turnover = total sales / average assets

2022 = $896,000 / $793,500 = 1.13

2021 = $796,000 / $674,500 = 1.18

return on assets = net income / average assets

2022 = $59,000 / $793,500 = 7.44%

2021 = $57,000 / $674,500 = 8.45%

earnings per share =

2022 = $59,000 / 20,700 = $2.85

2021 = $57,000 / 20,700 = $2.75