Consecutive five year balance sheets and income statements of Mary Lou Szabo Corporation are as follows:
|
Mary Lou Szabo Corporation |
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|
(Dollars in thousands) |
2009 |
2008 |
2007 |
2006 |
2005 |
|
Assets |
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|
Current assets: |
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|
Cash |
$24,000 |
$25,000 |
$26,000 |
$24,000 |
$26,000 |
|
Accounts receivable, net |
120,000 |
122,000 |
128,000 |
129,000 |
130,000 |
|
Inventories |
135,000 |
138,000 |
141,000 |
140,000 |
137,000 |
|
Total current assets |
279,000 |
285,000 |
295,000 |
293,000 |
293,000 |
|
Property, plant, and equipment, net |
500,000 |
491,000 |
485,000 |
479,000 |
470,000 |
|
Goodwill |
80,000 |
85,000 |
90,000 |
95,000 |
100,000 |
|
Total assets |
$859,000 |
$861,000 |
$870,000 |
$867,000 |
$863,000 |
|
Liabilities and Stockholders’ Equity |
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|
Current liabilities: |
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|
Accounts payable |
$180,000 |
$181,000 |
$181,500 |
$183,000 |
$184,000 |
|
Income taxes |
14,000 |
14,500 |
14,000 |
12,000 |
12,500 |
|
Total current liabilities |
194,000 |
195,500 |
195,500 |
195,000 |
196,500 |
|
Long term debt |
65,000 |
67,500 |
79,500 |
82,000 |
107,500 |
|
Redeemable preferred stock |
80,000 |
80,000 |
80,000 |
80,000 |
— |
|
Total liabilities |
339,000 |
343,000 |
355,000 |
357,000 |
304,000 |
|
Stockholders’ equity: |
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|
Preferred stock |
70,000 |
70,000 |
70,000 |
70,000 |
120,000 |
|
Common stock |
350,000 |
350,000 |
350,000 |
350,000 |
350,000 |
|
Paid in capital in excess of par, common stock |
15,000 |
15,000 |
15,000 |
15,000 |
15,000 |
|
Retained earnings |
85,000 |
83,000 |
80,000 |
75,000 |
74,000 |
|
Total stockholders’ equity |
520,000 |
518,000 |
515,000 |
510,000 |
559,000 |
|
Total liabilities and stockholders’ equity |
$859,000 |
$861,000 |
$870,000 |
$867,000 |
$863,000 |
|
Mary Lou Szabo Corporation |
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|
(Dollars in thousands) |
2009 |
2008 |
2007 |
2006 |
2005 |
|
Net sales |
$980,000 |
960,000 |
$940,000 |
$900,000 |
$880,000 |
|
Cost of goods sold |
625,000 |
616,000 |
607,000 |
580,000 |
566,000 |
|
Gross profit |
355,000 |
344,000 |
333,000 |
320,000 |
314,000 |
|
Selling and administrative expense |
240,000 |
239,000 |
238,000 |
239,000 |
235,000 |
|
Interest expense |
6,500 |
6,700 |
8,000 |
8,100 |
11,000 |
|
Earnings from continuing operations |
108,500 |
98,300 |
87,000 |
72,900 |
68,000 |
|
Income taxes |
35,800 |
33,400 |
29,200 |
21,700 |
23,100 |
|
Earnings from continuing operations |
72,700 |
64,900 |
57,800 |
51,200 |
44,900 |
|
Extraordinary loss, net of taxes |
— |
— |
— |
— |
30,000 |
|
Net earnings |
$72,700 |
$64,900 |
$57,800 |
$51,200 |
$14,900 |
|
Earnings (loss) per share: |
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|
Continuing operations |
$2.00 |
$1.80 |
$1.62 |
$1.46 |
$1.28 |
|
Extraordinary loss |
— |
— |
— |
— |
0.85 |
|
Net earnings per share |
$2.00 |
$1.80 |
$1.62 |
$1.46 |
$0.43 |
|
Redeemable preferred stock |
Preferred stock |
|
|
2006–2009 $6,400 |
2006–2009 |
$6,300 |
|
2005 |
10,800 |
Required
a. Compute the following for the years ended December 31, 2005–2009:
1. Net profit margin
2. Total asset turnover
3. Return on assets
4. DuPont return on assets
5. Operating income margin
6. Operating asset turnover
7. Return on operating assets
8. DuPont return on operating assets
9. Sales to fixed assets
10. Return on investment
11. Return on total equity
12. Return on common equity
13. Gross profit margin
Note: For ratios that call for using average balance sheet figures, compute the rate using average balance sheet figures and year end balance sheet figures.
b. Briefly comment on profitability and trends indicated in profitability. Also comment on the difference in results between using the average balance sheet figures and year end figures.