EXERCISE 2:Try again:

The financial statements of Elcamino Company appear below:

ELCAMINO COMPANY

Comparative Balance Sheet

December 31,

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Assets20172016

Cash .................................................................................................. $25,000..............................................................................................$40,000

Debt investments .............................................................................. 20,000 60,000

Accounts receivable (net) ................................................................. 50,000 30,000

Inventory ........................................................................................... 140,000 170,000

Property, plant and equipment (net) ................................................. 170,000.............................................................................................. 200,000

Total assets ................................................................................ $405,000 $500,000

Liabilities and stockholders' equity

Accounts payable ............................................................................. $25,000................................................................................................ $30,000

Short-term notes payable ................................................................. 40,000 90,000

Bonds payable .................................................................................. 75,000 160,000

Common stock .................................................................................. 160,000 145,000

Retained earnings ............................................................................ 105,000.............................................................................................. 75,000

Total liabilities and stockholders' equity....................................$405,000 $500,000

ELCAMINO COMPANY

Income Statement

For the Year Ended December 31, 2017

Net sales (all on credit) ..................................................................... $360,000

Cost of goods sold ............................................................................ ..................................................................................................... 184,000

Gross profit ....................................................................................... 176,000

Expenses

Interest expense ......................................................................... $11,000

Selling expenses ........................................................................ 30,000

Administrative expenses ............................................................ 20,000

Total expenses ..................................................................... 61,000

Income before income taxes ............................................................ 115,000

Income tax expense ......................................................................... ..................................................................................................... 35,000

Net income ........................................................................................ ..................................................................................................... $80,000

Additional information:

a.Cash dividends of $50,000 were declared and paid on common stock in 2017.

b.Weighted-average number of shares of common stock outstanding during 2017 was 50,000 shares.

c.Market price of common stock on December 31, 2017, was $16 per share.

d.Net cash provided by operating activities for 2017 was $70,000.

Instructions

Can you using the financial statements and additional information, compute the following ratios for the Elcamino Company for 2017.You Must show all computations.

1.Current ratio _________.

2.Return on common stockholders' equity _________.

3.Price-earnings ratio _________.

4.Inventory turnover _________.

5.Accounts receivable turnover _________.

6.Times interest earned _________.

7.Profit margin _________.

8.Days in inventory _________.

9.Payout ratio _________.

10.Return on assets _________.