S 13 -5 (L earn i ng Obj ec tiv e 5: Ev al u a t e t he t rend i n a co mp any ’ s c u rren t ra ti

S13-5 (Learning Objective 5: Evaluate the trend in a company’s current ratio) Examine the finan- cial data of Stephens Corporation.

 

 

 

 

 

Year Ended December 31

2012

2011

2010

Operating Results

 

 

 

Net income…………………………………………………..

$ 250

$ 340

$ 342

Per   common  share…………………………………………

$1.37

$1.68

$1.99

Percent   of   sales……………………………………………..

19.9%

17.9%

19.3%

Return on average stockholders’  equity…………….

21.0

18.0

19.0

Financial Position

 

 

 

Current  assets……………………………………………….

$ 590

$ 497

$ 445

Current   liabilities  ………………………………………….

$ 362

$ 333

$ 339

Working    capital   ……………………………………………

$ 228

$ 164

$ 106

Current      ratio ………………………………………………..

1.63

1.49

1.31

 

 

 

 

 

Show how to compute Stephens current ratio for each year 2010 through 2012. Is the company’s

ability to pay its current liabilities improving or deteriorating?