Financial Statement Analysis

Use the following information from the current year financial statements of a company to calculate the ratios below:

Income statement data: Sales (all on credit) $1,075,000 Cost of Goods Sold 575,000 Gross Profit on Sales $ 500,000 Operating Expenses 305,000 Operating Income $ 195,000 Interest Expense 20,400 Income Before Taxes $ 174,600 Income Taxes 74,000 Net Income $ 100,600 Balance sheet data: Cash $ 38,400 Accounts receivable 120,000 Inventory 56,700 Prepaid Expenses 24,000 Total current assets $ 239,100 Total plant assets 708,900 Total assets $ 948,000 Accounts payable $ 91,200 Interest payable 4,800 Long-term liabilities 204,000 Total liabilities $ 300,000 Common stock, $10 par 480,000 Retained earnings 168,000 Total liabilities and equity $ 948,000

(a) Current ratio. (b) Accounts receivable turnover. (Assume the prior year's accounts receivable balance was $100,000.) (c) Days' sales uncollected. (d) Inventory turnover. (Assume the prior year's inventory was $50,200.) (e) Times interest earned ratio. (f) Return on common stockholders' equity. (Assume the prior year's common stock balance was $480,000 and the retained earnings balance was $128,000.) (g) Earnings per share (assuming the corporation has a simple capital structure, with only common stock outstanding). (h) Price earnings ratio. (Assume the company's stock is selling for $26 per share.) (i) Divided yield ratio. (Assume that the company paid $1.25 per share in cash dividends.)