Question
Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firms performance for the most recent year. The
Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firms performance for the most recent year. The following data are taken from the firms latest annual report:
December 31 | Current Year | Prior Year |
---|---|---|
Quick assets | $710,000 | $562,000 |
Inventory and prepaid expenses | 482,000 | 422,000 |
Other assets | 4,908,000 | 4,310,000 |
Total Assets | $6,100,000 | $5,294,000 |
Current liabilities | $834,000 | $674,000 |
10% Bonds payable | 1,550,000 | 1,550,000 |
8% Preferred stock, $100 par value | 480,000 | 480,000 |
Common stock, $10 par value | 2,700,000 | 2,160,000 |
Retained earnings | 536,000 | 430,000 |
Total Liabilities and Stockholders Equity | $6,100,000 | $5,294,000 |
For the current year, net sales amount to $11,400,000, net income is $585,000, and preferred stock dividends paid are $42,000.
Calculate the following ratios for the current year:
1. Profit margin Round answer to one decimal place (ex: 0.144555 = 14.5%). Answer%
2. Return on assets Round answer to one decimal place (ex: 0.144555 = 14.5%). Answer%
3. Return on common stockholders equity Round answer to one decimal place (ex: 0.144555 = 14.5%). Answer%
4. Quick ratio Round answer to two decimal places (ex: 1.34543 = 1.35). Answer
5. Current ratio Round answer to two decimal places (ex: 1.34543 = 1.35). Answer
6. Debt-to-equity ratio Round answer to two decimal places (ex: 1.34543 = 1.35).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started