Question

Exercise 13-13

The condensed financial statements of Crane Company for theyears 2016 and 2017 are presented below.

CRANE COMPANY Balance Sheets December 31 (in thousands)
		2017		2016
Current assets
Cash and cash equivalents		$330		$360
Accounts receivable (net)		530		460
Inventory		640		570
Prepaid expenses		130		160
Total current assets		1,630		1,550
Property, plant, and equipment (net)		410		380
Investments		70		70
Intangibles and other assets		530		510
Total assets		$2,640		$2,510
Current liabilities		$880		$850
Long-term liabilities		660		560
Stockholders’ equity—common		1,100		1,100
Total liabilities andstockholders’ equity		$2,640		$2,510

CRANE COMPANY Income Statements For the Year Ended December 31 (in thousands)
		2017		2016
Sales revenue		$3,980		$3,640
Costs and expenses
Cost of goods sold		1,030		950
Selling & administrative expenses		2,400		2,330
Interest expense		10		20
Total costs and expenses		3,440		3,300
Income before income taxes		540		340
Income tax expense		216		136
Net income		$ 324		$ 204

Compute the following ratios for 2017 and 2016. (Roundcurrent ratio and inventory turnover to 2 decimal places, e.g 1.83and all other answers to 1 decimal place, e.g. 1.8 or12.6%.)

(a)		Current ratio.
(b)		Inventory turnover. (Inventory on December 31, 2015, was$390.)
(c)		Profit margin.
(d)		Return on assets. (Assets on December 31, 2015, were$2,720.)
(e)		Return on common stockholders’ equity. (Equity on December 31,2015, was $950.)
(f)		Debt to assets ratio.
(g)		Times interest earned.