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Part A
The balance sheet and income statement of Post Inc. are shown below.
Additional Information: No shares were issued and no dividends were paid during the year. There were 30 common shares outstanding throughout the year. Assume ending balance sheet amounts are the same as averages where applicable.
Required:
- Calculate
- current ratio
- number of days of sales in inventory
- earnings per share
- return on shareholders’ equity ratio.
- Comment on the results.
- (Appendix) Restate the financial statements to facilitate Scott formula analysis. Assume interest expense (before tax) is $10 and is included in operating expenses.
- (Appendix) Calculate the Scott formula and comment on the results. Does this change any of your observations from part 2?
Part B
Assume that the following unrelated transactions occurred in Post Inc. in 2019.
Required: Indicate the effect of each transaction below on the current ratio.
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