B 1 2 3 Recent financial statements for Zimmer, Inc. are as follows: Zimmer Company Comparative Balance Sheet 4 Zimmer Company Income Statement This Year This Year Last Year 5 Assets 6 Current assets: 7 Cash 360,000 $310,000 Sales (all on account) $4,980,000 8 Marketable securities 220,000 80,000 Cost of goods sold 2,988,000 9 Accounts receivable, net 775,000 700,000 Gross margin 1,992,000 10 Inventory 925,000 750,000 Selling and administrative expenses 11 Other current assets 355,000 195,000 Operating expenses 985,500 12 Total current assets 2,635,000 2,035,000 Depreciation and amortization 410,500 13 Plant and equipment, net 1,975,000 1,800,000 General and administrative expenses 150,000 14 Other assets 75,000 100,000 Total selling and administrative expenses 1,546,000 18 19 899 15 Total assets 16 Liabilities and Stockholders' Equity 17 Current Liabilities: Accounts payable Short-term bank loans 4.685.000 $ 3.935,000 Net operating income 446,000 Interest expense Net income before taxes 250,000 $ 225,000 Income taxes 750,000 600,000 Net income 60,000 386,000 135,100 $ 250.900 16 Liabilities and Stockholders' Equity 17 Current Liabilities: 18 Accounts payable Interest expense Net income before taxes 250,000 $ 225,000 Income taxes 60,000 386,000 19 Short-term bank loans 750,000 600,000 Net income 135,100 $ 250.900 20 Accrued payables 550,000 395,000 21 Other current liabilities 275,000 223,400 Additional information: 22 Total current liabilities 1,825,000 23 Bonds payable, 10% 575,000 1,443,400 Dividend per share paid in current year 400,000 1.00 Market price of shares at year end 42.00 24 Total liabilities 2,400,000 1,843,400 Par value of common stock per share 20.00 25 Stockholders' equity: 26 Common stock 1,150,000 1,150,000 Number of share outstanding 57,500 27 Retained earnings 28 Total stockholders' equity 1,135,000 941,600 2,285,000 2,091,600 29 Total liabilities and stockholders' equity S 4.685.000 $3,935,000 30 32 Compute the following ratios for the current year only: 33 Gross margin percentage 34 Current ratio (rounded to two decimal places) 35 Acid-test ratio (rounded to two decimal places) 36 Accounts receivable turnover (rounded to two decimal places) 37 Average collection period (rounded to the nearest whole day) 38 Inventory turnover ratio (rounded to two decimal places) 39 Average sales period (rounded to the nearest whole day) 40 Debt-to-equity ratio (rounded to two decimal places) 41 Times interest earned (rounded to two decimal places) 42 Book value per share (rounded to two decimal places) 43 Earnings per share (rounded to two decimal places) 44 Dividend payout ratio (rounded to three decimal places) 45 Dividend yield ratio (rounded to three decimal places) 46 Price-earnings ratio (rounded to two decimal places) 17 40% 1.44