Using Knapp Inc’s financial statements and the ratios for Competition Inc (Knapps closest competitor) which firm is more efficient at using their assets to generate sales as of December 31, 2017.
Knapp Inc. balance sheet at Dec 31, 2017 and Dec 31, 2018
2017 | 2018 | |
---|---|---|
Cash | $200 | $150 |
Accounts Receivable (A/R) | $450 | $425 |
Inventory | $550 | $625 |
Current Assets | $1,200 | $1,200 |
Plant and Equipment | 2,200 | $2,600 |
Less Accumulated preciation | ($1,000) | ($1,200) |
Net Plant and Equipment | $1,200 | $1,400 |
Total Assets | $2,400 | $2,600 |
Liabilities and Owners’ Equity | ||
Accounts Payable (A/P) | $200 | $150 |
otes Payable | $0 | $150 |
Current Liabilities | $200 | $300 |
Bonds | $600 | $600 |
Owners’ Equity | ||
Common Stock | $900 | $900 |
Retained Earnings | $700 | $800 |
Total Owners Equity | $1,600 | $1,700 |
Total Liabilities and Owner’s Equity | $2,400 | $2,600 |
Knapp Inc. Income Statement for Years Ended Dec. 31, 2017 and Dec. 31, 2018
2017 | 2018 | |
---|---|---|
Sales | $1,200 | $1,450 |
Cost of Goods Sold | $700 | $850 |
Gross Profit | $500 | $600 |
BiIling, General, and Administrative Expenses | $30 | $40 |
Depreciation | $220 | $200 |
Operating Income | $250 | $360 |
Interest Expense | $50 | $64 |
Net Income Before Taxes | $200 | $296 |
Taxes (40%) | $80 | $118 |
Net Income | $120 | $178 |
List of Ratios for Competition Inc
2017 | 2018 | |
---|---|---|
Debt Ratio | 41% | 33% |
Total Asset Turnover | 0.7 | 0.3 |
Days in Receivables | 98.8 | 121.6 |
Days in Inventory | 60.7 | 77.1 |