Question Republic Company has the following financial reports: REPUBLIC COMPANY Balance Sheet December 31, 2020 ASSETS Cash Accounts receivable Inventory Fixed assets, net $ 1,000,000 5,000,000 7,000,000 17,000,000 $ 4,000,000 2,000,000 2,000,000 12,000,000 LIABILITIES AND STOCKHOLDERS' EQUITY Notes payable, bank (short term) Accounts payable Accrued expenses Long-term debt 6% Preferred stock, $100 par, 40,000 shares Issued and outstanding Common stock, $100 par, 20,0000 shares issued and outstanding Retained earnings Total liabilities and stockholders' equity 4,000,000 2,000,000 4,000,000 Total assets $ 30,000,000 $ 30,000,000 $ 16,000,000 4,000,000 $ 20,000,000 REPUBLIC COMPANY Income Statement For the Year Ended December 31, 2020 Net sales Credit Cash Total Cost and expenses Cost of goods sold Selling, general, and administrative expenses Depreciation Interest Net income before taxes Taxes on income Net income after taxes Less: Dividends on preferred stock Net income available to common stockholders $ 12,000,000 2,200,000 1,400,000 1,200,000 16,800,000 $ 3,200,000 1,200,000 $ 2,000,000 240,000 $ 1,760,000 REPUBLIC COMPANY Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January 1 Add: Net income Subtotal Less: Dividends paid Preferred stock Common stock Retained earnings, December 31 $ 2,600,000 2,000,000 $ 4,600,000 $ 240,000 360.000 600,000 $ 4,000,000 Required: (Solutions/Answers must be handwritten.) a. Fill in the 2020 column (4th column) in the table that follows. Assume that beginning balances and ending balances of specific assets are the same. Share price for the common stock was $270 at year-end of 2020 and book value per share was $300. Present the formula and computation for each ratio. Evaluation Cross- sectional 2020 Time-series 2018-2020 2020 2019 2.0 0.9 3.0x 122 days 4.5x 81 days Ratio Current ratio Acid-test ratio Inventory turnover Age of inventory Accounts receivable turnover Age of receivables Total asset turnover Gross profit margin Net profit margin Return on assets Return on equity Earnings per share Debt ratio Times interest earned Price/Earnings ratio Price to book ratio 2018 2.5 1.0 4.0x 91 days 5.Ox 73 days 0.9X 39% 17% 5.3% 15% $98 60% 5.5x 2.857 0.92 0.8x 41% 15% 5.5% 20% $95 65% 4.5x 2.895 0.91 Industry Average 2020 2.25 1.10 4.0x 91 days 6.0x 61 days 1.0x 40% 15% 7% 20% $75 48% 4.0x 2.805 0.91

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