Comprehensive Ratio Analysis P3.Tuxedo Corporations conden

Comprehensive Ratio Analysis P3.Tuxedo Corporations condensed comparative income statements and balance sheets follow. All figures are given in thousands of dollars except earnings per share. 1a: 2014 Current ratio: 1.5 times 1e: 2014 Inventory turnover: 3.9 times 2c: 2014 Return on assets: 5.0% tuxedo CorporationComparative Income Statements For the years ended December 31 2014 and 2013 3b: 2014 Return on equity: 8.2% 4a: 2014 Cash flow yield: 1.7 times 5b: 2014 Dividend yield: 1.3% 2014 2013 Net sales $800400 $742600 Cost of goods sold 454100 396200 Gross margin $346300 $346400 Operating expenses: Selling expenses $130100 $104600 Administrative expenses 140300 115500 Total operating expenses $270400 $220100 Income from operations $ 75900 $126300 Interest expense 25000 20000 Income before income taxes $ 50900 $106300 Income taxes expense 14000 35000 Net income $ 36900 $ 71300 Earnings per share $ 2.46 $ 4.76 tuxedo Corporation Comparative Balance Sheets December 31 2014 and 2013 Cash Assets 2014 $ 31100 2013 $ 27200 Accounts receivable (net) 72500 42700 Inventory 122600 107800 Property plant and equipment (net) 577700 507500 Total assets $803900 $685200 Liabilities and Stockholders equity Accounts payable $104700 $ 72300 Notes payable (short-term) 50000 50000 Bonds payable 200000 110000 Common stock $10 par value 300000 300000 Retained earnings 149200 152900 Total liabilities and stockholders equity $803900 $685200 Additional data for Tuxedo in 2014 and 2013 follow. 2014 2013 Net cash flows from operating activities $64000 $99000 Net capital expenditures $119000 $38000 Dividends paid $31400 $35000 Number of common shares 30000 30000 Market price per share $80 $120 Balances of selected accounts at the end of 2012 were accounts receivable (net) $52700; inventory $99400; accounts payable $64800; total assets $647800; and stockhold- ers equity $376600. All of the bonds payable were long-term liabilities. ReQUIReD Perform the following analyses. (Round to one decimal place.) 1. Prepare an operating asset management analysis by calculating for each year the (a) current ratio (b) quick ratio (c) receivables turnover (d) days sales uncol- lected (e) inventory turnover (f) days inventory on hand (g) payables turnover (h) days payable and (i) financing period. 2. Prepare a profitability and total asset management analysis by calculating for each year the (a) profit margin (b) asset turnover and (c) return on assets. 3. Prepare a financial risk analysis by calculating for each year the (a) debt to equity ratio (b) return on equity and (c) interest coverage ratio. 4. Prepare a liquidity analysis by calculating for each year the (a) cash flow yield (b) cash flows to sales (c) cash flows to assets and (d) free cash flow. 5. Prepare an analysis of market strength by calculating for each year the (a) price/ earnings (P/E) ratio and (b) dividend yield. 6.aCCounting ConneCtion After making the calculations indicate whether each ratio improved or deteriorated from 2013 to 2014 (useFfor favorable andUfor unfavorable and consider changes of 0.1 or less to be neutral)

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