Question
Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31,
Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to 0 decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to 0 decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).)
Situation | Ratio | |||
---|---|---|---|---|
1. | 18,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $55,000. | Return on common stockholders equity | ||
2. | All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $906,000. | Debt to assets ratio | ||
3. | The market price of common stock was $9 and $13 on December 31, 2022 and 2023, respectively. | Price-earnings ratio |
2022 | 2023 | % Change | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Return on common stockholders equity | enter percentages | % | enter percentages | % | enter percentages | % | ||||
Debt to assets ratio | enter percentages | % | enter percentages | % | enter percentages | % | ||||
Price earnings ratio | enter a price earnings ratio in times | times | enter a price earnings ratio in times | times | enter percentages | % |
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