Use the following information to answer questions 1 through 10.
Financial statements for Praven Company appear below:
Praven Company
Statement of Financial Position
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2 Year 1
Currrent assets:
Cash and marketable securities 150 130
Accounts receivable, net 190 160
Inventory 170 180
Prepaid expenses 50 40
Total current assets 560 510
Noncurrent assets:
Plant & equipment, net 1,420 1,330
Total assets $1,980 $1,840
Current liabilities:
Accounts payable 110 100
Accrued liabilities 90 60
Notes payable, short term 260 260
Total current liabilities 460 420
Noncurrent liabilities:
Bonds payable 400 400
Total liabilities 860 820
Stockholder’s equity:
Preferred stock, $5 par, 15% 120 120
Common stock, $10 par 240 240
Additional paid-in capital—common stock 210 210
Retained earnings 550 450
Total stockholders’ equity 1,120 1,020
Total liabilities & stockholders’ equity $1,980 $1,840
Dividends during Year 2 totaled $89 thousand, of which $18 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $130.
Praven Company
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account) 1,700
Cost of goods sold 1,190
Gross margin 510
Selling and administrative expense 200
Net operating income 310
Interest expense 40
Net income before taxes 270
Income taxes (30%) 81
Net income $189
Required:
Compute the following for Year 2:
1. Book value per share
2. Working capital
3. Current ratio
4. Acid-test ratio
5. Accounts receivable turnover
6. Average collection period
7. Inventory turnover
8. Average sale period
9. Times interest earned
10. Debt-to-equity ratio
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