1 Recent financial statements for Zimmer, Inc. are as follows: 2 3 4 Zimmer Company Comparative Balance Sheet This Year Last Year 5 Assets 6 Current assets: Zimmer Company Income Statement This Year 7 Cash 8 Marketable securities 9 Accounts receivable, net 10 Inventory 11 Other current assets $ 360,000 $ 310,000 Sales (all on account) $4,980,000 220,000 80,000 Cost of goods sold 2,988,000 775,000 700,000 Gross margin 1,992,000 925,000 355,000 195,000 750,000 Selling and administrative expenses Operating expenses 985,500 12 Total current assets 2,635,000 2,035,000 13 Plant and equipment, net 14 Other assets 15 Total assets 1,975,000 1,800,000 Depreciation and amortization General and administrative expenses 410,500 150,000 75,000 100,000 Total selling and administrative expenses 1,546,000 $ 4,685,000 $ 3,935,000 Net operating income 446,000 18 2822222222222 20 16 Liabilities and Stockholders' Equity 17 Current Liabilities: Accounts payable 19 Short-term bank loans Accrued payables 21 Other current liabilities 22 Total current liabilities 23 Bonds payable, 10% 24 Total liabilities 25 Stockholders' equity: 26 Common stock 27 Retained earnings 28 Total stockholders' equity Interest expense 60,000 $ 250,000 $ 225,000 750,000 Net income before taxes Income taxes 386,000 135,100 600,000 Net income $ 250,900 550,000 395,000 275,000 1,825,000 575,000 2,400,000 223,400 Additional information: 1,443,400 Dividend per share paid in current year 400,000 Market price of shares at year end 1,843,400 Par value of common stock per share $ 1.00 42.00 20.00 1,150,000 1,150,000 Number of shares outstanding 1,135,000 2,285,000 941,600 2,091,600 29 Total liabilities and stockholders' equity $ 4,685,000 $ 3,935,000 Required: Compute the following ratios for the current year only: Gross margin percentage 4 Current ratio (rounded to two decimal places) 5 Acid-test ratio (rounded to two decimal places) 5 Accounts receivable turnover (rounded to two decimal places) 7 Average collection period (rounded to the nearest whole day) 3 Inventory turnover ratio (rounded to two decimal places) Average sales period (rounded to the nearest whole day) O Debt-to-equity ratio (rounded to two decimal places) Times interest earned (rounded to two decimal places) Book value per share (rounded to two decimal places) 3 Earnings per share (rounded to two decimal places) Dividend payout ratio (rounded to three decimal places) 5 Dividend yield ratio (rounded to three decimal places) 5 Price-earnings ratio (rounded to two decimal places)