Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements: Balance sheet information: 2011 2012 Current assets $ 15,000

Grogan Inc. Grogan Inc. had the following information available from its 2011 and 2012 financial statements:

Balance sheet information:

2011

2012

Current assets

$ 15,000

$ 20,000

Long-term assets

107,000

207,000

Total assets

$122,000

$227,000

Current liabilities

$ 16,000

$ 11,500

Long-term liabilities

40,000

60,000

Total liabilities

$ 56,000

$ 71,500

Common stock

$ 30,000

$71,750

Retained earnings

36,000

83,750

Total stockholders' equity

$ 66,000

$155,500

Income statement information:
Income before interest and taxes

$ 50,000

$105,000

Interest expense

4,000

6,000

Tax expense

10,000

26,250

Net income

$ 36,000

$72,750

Other information:
Dividends paid to stockholders

$ 0

$25,000

Average income tax rate

20%

25%

Net cash flows from operations

$25,000

$75,000

Cash paid for acquisitions

$10,000

$85,000

Refer to the Grogan Inc. information above. Grogan had an average of 7,000 shares of common stock outstanding during 2012. At the end of the year, the market price per share was $100. The company's price earnings (P/E) ratio for 2012 is: (round to two decimal places)

Select one:

b. 6.67 to 1.

c. 9.62 to 1.

d. 19.44 to 1.

2. Refer to the Grogan Inc. information above. Grogan's debt-to-equity ratio for 2012 is: (round to two decimal places)

Select one:

a. 2.17.

b. 0.46.

c. 0.85.

3. Bernstein Inc. is a local retailer. The following selected information is available from their 2011 and 2012 financial statements:

Accounts receivable at 12/31/11

$ 160,000

Accounts receivable at 12/31/12

240,000

Inventory at 12/31/11

300,000

Inventory at 12/31/12

360,000

Net credit sales for 2012

3,400,000

Cost of goods sold for 2012

1,980,000

Net income for 2012

1,000,000

Refer to the Bernstein Inc. information above. What was Bernstein's number of days sales in receivables for 2012? (round to two decimal places)

Select one:

a. 21.47 days

b. 73.00 days

c. 146.00 days

Refer to the Bernstein Inc. information above. What was Bernstein's inventory turnover ratio for 2012? (round to two decimal places)

Select one:

a. 6.00

b. 3.00

d. 1.52

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

3. What are the current trends in computer hardware platforms?

Answered: 1 week ago