1.

The financial statements of Hainz Company appear below:

HZ COMPANY

Comparative Balance Sheet

December 31,

Assets 2017 2016

Cash.................................................................................................... $ 15,000 $ 35,000

Short-term investments............................................................................ 20,000 60,000

Accounts receivable (net)......................................................................... 40,000 30,000

Inventory.............................................................................................. 65,000 75,000

Property, plant and equipment (net)........................................................... 260,000 300,000

Total assets .................................................................................... $400,000 $500,000

Liabilities and stockholders' equity

Accounts payable................................................................................... $ 15,000 $ 25,000

Short-term notes payable......................................................................... 40,000 90,000

Bonds payable....................................................................................... 80,000 160,000

Common stock....................................................................................... 155,000 155,000

Retained earnings................................................................................... 110,000 70,000

Total liabilities and stockholders' equity............................................... $400,000 $500,000

HZ COMPANY

Income Statement

For the Year Ended December 31, 2017

Net sales............................................................................................... $450,000

Cost of goods sold.................................................................................. 300,000

Gross profit........................................................................................... 150,000

Expenses

Operating expenses........................................................................... $40,000

Interest expense............................................................................... 15,000

Total expenses........................................................................... 65,000

Income before income taxes..................................................................... 85,000

Income tax expense................................................................................ 22,000

Net income............................................................................................ $ 63,000

Additional information:

a. Cash dividends of $23,000 were declared and paid in 2017.

b. Weighted-average number of shares of common stock outstanding during 2017 was 30,000 shares.

c. Market value of common stock on December 31, 2017, was $21 per share.

Instructions

Using the financial statements and additional information, compute the following ratios for HZ Company for 2017. Show all computations.

Computations

1. Current ratio _________.

2. Return on common stockholders' equity _________.

3. Price-earnings ratio _________.

4. Acid-test ratio _________.

5. Accounts receivable turnover _________.

6. Times interest earned _________.

7. Profit margin _________.

8. Days in inventory _________.

9. Payout ratio _________.

10. Return on assets _________.