Stanton Enterprises
Worksheet 9-39B
Analysis of Financial Statements
and Audit Planning Worksheet
12/31/2016
BALANCE SHEET
Preliminary Audited %
12/31/16 % 12/31/15 %Change
Cash $243,689 1.4 $133,981 1.1 81.9
Trade accounts receivable 3,544,009 19.7 2,224,921 17.7 59.3
Allowance for uncollectible
accounts (120,000) -0.7 (215,000) -1.7 -44.2
Inventories 4,520,902 25.1 3,888,400 31.0 16.3
Less, accumulated
depreciation (4,382,990) -24.4 (3,775,911) -30.1 16.1
8,562,265 47.6 6,146,623 49.0 39.3
Goodwill 1,200,000 6.7 345,000 2.7 247.8
$17,980,365 100.0 $12,548,625 100.0 43.3
Accounts payable $2,141,552 11.9 $2,526,789 20.1 -15.2
Bank loan payable 150,000 0.8 0 0.0 —
Accrued liabilities 723,600 4.0 598,020 4.8 21.0
Additional paid-in capital 2,469,921 13.7 1,333,801 10.6 85.2
Retained earnings 8,845,292 49.2 3,891,015 31.0 127.3
12,565,213 69.9 6,224,816 49.6 101.9
Stanton Enterprises
Worksheet 9-39B, cont.
COMBINED STATEMENT OF INCOME AND RETAINED EARNINGS
Preliminary Audited %
12/31/16 % 12/31/15 % Change
Sales $43,994,931 100.0 $32,258,015 100.0 36.4
Cost of goods sold 24,197,212 55.0 19,032,229 59.0 27.1
Gross profit 19,797,719 45.0 13,225,786 41.0 49.7
Selling, general and
administrative expenses 10,592,221 24.1 8,900,432 27.6 19.0
Pension cost 1,117,845 2.5 865,030 2.7 29.2
Interest cost 83,376 0.2 104,220 0.3 -20.0
Income tax expense 1,800,000 4.1 1,141,000 3.5 57.8
Net income 6,204,277 14.1 2,215,104 6.9 180.1
Current ratio 1.84 1.18
Quick ratio 0.82 0.42
Days to collect 29.40 25.18
Inventory turnover 5.35 4.89
Days to sell 68.20 74.57
Days to convert to cash 97.60 99.75
Debt to equity ratio 0.43 1.02
Tangible net assets to equity 1.34 1.96
Times interest earned 97.00 33.20
Efficiency ratio 2.62 2.64