2. Ratio computation. The financial statements of the Lone Pine Company follow.

LONE PINE COMPANY

Comparative Balance Sheets

December 31, 20X2 and 20X1 ($000 Omitted)

20X2 20X1

Assets

Current Assets

Cash and Short-Term Investments $ 3,400 $ 3,000

Accounts Receivable (net) 6,000 4,800

Inventories 5,000 4,600

Total Current Assets $14,400 $12,400

Property, Plant, and Equipment

Land $4,700 $ 3,000

Buildings and Equipment (net) 4,500 3,400

Total Property, Plant, and Equipment $9,200 $6,400

Total Assets $23,600 $18,800

Liabilities and Stockholders? Equity

Current Liabilities

Accounts Payable $4,800 $4,100

Notes Payable 4,100 4,300

Total Current Liabilities $5,900 $6,000

Long-Term Liabilities

Bonds Payable 7,100 4,500

Total Liabilities $13,000 $10,500

Stockholders? Equity

Common Stock par value $1$ 3,200 $ 2,600

Number of Shares3,2002,600

Retained Earnings 7,400 5,700

Total Stockholders? Equity $10,600 $8,300

Total Liabilities and Stockholders? Equity $23,600 $18,800

LONE PINE COMPANY

Statement of Income and Retained Earnings

Or the Year Ending December 31, 20X2 ($000 Omitted)

Net Sales* $45,000

Less: Cost of Goods Sold $20,000

Selling Expense 6,000

Administrative Expense 4,000

Interest Expense 400

Income Tax Expense 2,000 32,400

Net Income $ 3,600

Retained Earnings, Jan. 1 900

$ 4,500

Cash Dividends Declared and Paid 3,100

Retained Earnings, Dec. 31 $ 1,400

*All sales are on account.

Instructions

Compute the following items for Lone Pine Company for 20X2, rounding all calculations to two decimal places when necessary:

a. Quick ratio

b. Current ratio

c. Inventory-turnover ratio

d. Accounts-receivable-turnover ratio

e. Return-on-assets ratio

f. Net-profit-margin ratio

g. Return-on-common-stockholders? equity

h. Debt-to-total assets

i. Number of times that interest is earned

j. Dividend payout rate

2. Ratio computation. The financial statements of the Lone Pine Company follow. LONE PINE COMPANY Comparative Balance Sheets December 31, 20X2 and 20X1 ($000 Omitted) Assets Current Assets Cash and Short-Term Investments Accounts Receivable (net) Inventories Total Current Assets Property, Plant, and Equipment Land Buildings and Equipment (net) Total Property, Plant, and Equipment Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Notes Payable Total Current Liabilities Long-Term Liabilities Bonds Payable Total Liabilities Stockholders' Equity Common Stock par value $1 Number of Shares Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $9,200 20X2 20X1 $ 3,400 6,000 5,000 $14,400 $ 3,000 4,800 4,600 $12,400 $4,700 4,500 $ 3,000 3,400 $6,400 $23,600 $18,800 $4,800 4,100 $5,900 $4,100 4,300 $6,000 7,100 $13,000 4,500 $10,500 $ 3,200 3,200 7,400 $10,600 $23,600 $ 2,600 2,600 5,700 $8,300 $18,800 LONE PINE COMPANY Statement of Income and Retained Earnings Or the Year Ending December 31, 20X2 ($000 Omitted) Net Sales* Less: Cost of Goods Sold Selling Expense Administrative Expense Interest Expense Income Tax Expense Net Income Retained Earnings, Jan. 1 Cash Dividends Declared and Paid Retained Earnings, Dec. 31 *All sales are on account. $20,000 6,000 4,000 400 2,000 $45,000 32,400 $ 3,600 900 $ 4,500 3,100 $ 1,400 Instructions Compute the following items for Lone Pine Company for 20X2, rounding all calculations to two decimal places when necessary: a. Quick ratio b. Current ratio c. Inventory-turnover ratio d. Accounts-receivable-turnover ratio e. Return-on-assets ratio f. Net-profit-margin ratio g. Return-on-common-stockholders' equity h. Debt-to-total assets i. Number of times that interest is earned j. Dividend payout rate