Question

Financial Information for Case9-1
Industy Wide
Balance Sheets
Years Ended December 31, 2014and 2015
	2015	2014
Assets
Current Assets:
Cash	$ 30,000	$ 25,000
Accounts receivable	110,000	90,000
Inventories	100,000	80,000
Total Current Assets	240,000	195,000
Fixed Assets;
Plant and equipment	250,000	220,000
Less accumulated depreciation	(100,000)	(65,000)
Land	50,000	50,000
Total Fixed Assets	200,000	205,000
Total Assets	$ 440,000	$ 400,000
Liabilities and Equity
Current Liabilities:
Accounts payable	$ 58,000	$ 50,000
Notes payable-due within one year	50,000	50,000
Accrued liabilities	-	-
Total Current Liabilities	108,000	100,000
Long Term Liabilities	32,000	20,000
Total Liabilities	140,000	120,000
Stockholders' Equity:
Common stock	100,000	100,000
Retained earnings	200,000	180,000
Total Stockholders' Equity	300,000	280,000
Total Liabilities and Equty	$ 440,000	$ 400,000
Industry Wide
Income Statement
Years Ended December 31, 2014and 2015
Revenues	$ 1,100,000	$ 1,000,000
Cost of goods sold	(700,000)	(650,000)
Gross margin	400,000	350,000
Operating expenses	(275,000)	(255,000)
Operating income	125,000	95,000
Interest expense	(15,000)	(15,000)
Income before taxes	110,000	80,000
Income taxes	(44,000)	(32,000)
Net income	$ 66,000	$ 48,000

Financial Information for Case9-1
Industy Wide
Balance Sheets
Years Ended December 31, 2014and 2015
	2015	2014
Assets
Current Assets:
Cash	$ 30,000	$ 25,000
Accounts receivable	110,000	90,000
Inventories	100,000	80,000
Total Current Assets	240,000	195,000
Fixed Assets;
Plant and equipment	250,000	220,000
Less accumulated depreciation	(100,000)	(65,000)
Land	50,000	50,000
Total Fixed Assets	200,000	205,000
Total Assets	$ 440,000	$ 400,000
Liabilities and Equity
Current Liabilities:
Accounts payable	$ 58,000	$ 50,000
Notes payable-due within one year	50,000	50,000
Accrued liabilities	-	-
Total Current Liabilities	108,000	100,000
Long Term Liabilities	32,000	20,000
Total Liabilities	140,000	120,000
Stockholders' Equity:
Common stock	100,000	100,000
Retained earnings	200,000	180,000
Total Stockholders' Equity	300,000	280,000
Total Liabilities and Equty	$ 440,000	$ 400,000
Industry Wide
Income Statement
Years Ended December 31, 2014and 2015
Revenues	$ 1,100,000	$ 1,000,000
Cost of goods sold	(700,000)	(650,000)
Gross margin	400,000	350,000
Operating expenses	(275,000)	(255,000)
Operating income	125,000	95,000
Interest expense	(15,000)	(15,000)
Income before taxes	110,000	80,000
Income taxes	(44,000)	(32,000)
Net income	$ 66,000	$ 48,000

1. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for 2014 and 2015 for the JordanCorporation.

2. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for the Industry.

3. Compare the performance of the Jordan Corporation between2014 and 2015 and comment on the trend of each ratio.

4. Compare the performance of the Jordan Corporation in 2015 tothe industry averages and comment on each.