$ 100,000 80,000 Given the financial statements for Jones Corporation and Smith Corporation: JONES CORPORATION Current Assets Liabilities Cash $ 20,000 Accounts payable Accounts receivable 80,000 Bonds payable long term) Inventory 50,000 Long-Term Assets Stockholders' Equity Gross fixed assets $ 500,000 Common stock Less: Accumulated depreciation 150,000 Paid-in capital Net fixed assets* 350,000 Retained earnings Total assets $ 500,000 Total liabilities and equity $ 150,000 70,000 100,000 $ 500,000 Sales (on credit) Cost of goods sold Gross profit Selling and administrative expenset Depreciation expense Operating profit Interest expense Earnings before taxes Tax expense Net income $ 1,250,000 750,000 $ 500,000 257,000 50,000 $ 193,000 8,000 $ 185,000 92,500 $ 92,500 *Use net fixed assets in computing fixed asset turnover. includes $7,000 in lease payments. SMITH CORPORATION Current Assets Liabilities Cash $ 35,000 Accounts payable Marketable securities 7,500 Bonds payable (long term) Accounts receivable 70,000 Inventory 75,000 Long-Term Assets Stockholders' Equity Gross fixed assets $ 500,000 Common stock Less: Accumulated depreciation 250,000 Paid-in capital Net fixed assets* 250,000 Retained earnings Total assets $ 437,500 Total liabilities and equity $ 75,000 210,000 $ 75,000 30,000 47,500 $ 437,500 $ *Use net fixed assets in computing fixed asset turnover. SMITH CORPORATION Sales (on credit) $ 1,000,000 Cost of goods sold 600,000 Gross profit 400,000 Selling and administrative expenset 224,000 Depreciation expense 50,000 Operating profit $ 126,000 Interest expense 21,000 Earnings before taxes $ 105,000 Tax expense 52,500 Net income $ 52,500 Tincludes $7,000 in lease payments. rounded to 2 decimal places. Round all other answers to 2 decimal places.) Answer is complete but not entirely correct. Jones Corp. Smith Corp. Profit margin 7.40 5.25 Return on assets 18.50 % 12.00 (investments) Return on equity 28.91 % 34.43 % Receivable turnover 15.63 times 14.29 times Average collection period 23.03 days 25.19 days Inventory turnover 15.00 times 8.00 times Fixed asset turnover 3.57 times 4.00 times Total asset turnover times 2.29 times Current ratio 1.50 times 2.49 times Quick ratio 55.56 times 39.47 times Debt to total assets 97.30 % 58.10 % Times interest earned 23.13 times 5.00 times Fixed charge coverage 292.39 times 180.00 times >IX 2.50