Case Study

RONDO CORPORATION

Balance Sheets

December $31$

$20172016$

Cash $ $5,300$ $ $3,700$

Accounts receivable $21,20023,400$

Inventory $9,0007,000$

Land $20,00026,000$

Buildings $70,00070,000$

Accumulated depreciation$$buildings $-15,000-10,000$

Total $$110,500$ $$120,100$

Accounts payable $ $10,370$ $ $31,100$

Common stock $75,00069,000$

Retained earnings $25,13020,000$

Total $$110,500$ $$120,100$

Rondo$$s $2017$ income statement included net sales of $$120,000,$ cost of goods sold of $$70,000,$ and net income of $$14,000.$

Compute the below mentioned financial ratios for $2017.$

Current ratio

a$.$

$3\mathrm{.}42$

b$.$

$5\mathrm{.}44$

c$.$

$2\mathrm{.}43$

d$.$

$3\mathrm{.}6$

Accounts receivable turnover

a$.$

$8\mathrm{.}5$

b$.$

$4\mathrm{.}36$

c$.$

$5\mathrm{.}38$

d$.$

$4\mathrm{.}99$

Return on common stockholders$$ equity

a$.$

$15\mathrm{.}10\%$

b$.$

$13\mathrm{.}90\%$

c$.$

$13\mathrm{.}30$

d$.$

$14\mathrm{.}80\%$

Debt to assets ratio

a$.$

$8\mathrm{.}50\%$

b$.$

$9\mathrm{.}40\%$

c$.$

$7\mathrm{.}90\%$

d$.$

$10\mathrm{.}10\%$

Return on assets.

a$.$

$11\mathrm{.}80\%$

b$.$

$13\mathrm{.}10\%$

c$.$

$12\mathrm{.}10\%$

d$.$

$11\mathrm{.}50\%$