Question
Markus Companys common stock sold for $2.75 per share at the end of this year. The company paid a common stock dividend of $0.55 per
Markus Companys common stock sold for $2.75 per share at the end of this year. The company paid a common stock dividend of $0.55 per share this year. It also provided the following data excerpts from this years financial statements |
Ending Balance | Beginning Balance | |||
Cash | $ | 35,000 | $ | 30,000 |
Accounts receivable | $ | 60,000 | $ | 50,000 |
Inventory | $ | 55,000 | $ | 60,000 |
Current assets | $ | 150,000 | $ | 140,000 |
Total assets | $ | 450,000 | $ | 460,000 |
Current liabilities | $ | 60,000 | $ | 40,000 |
Total liabilities | $ | 130,000 | $ | 120,000 |
Common stock, $1 par value | $ | 120,000 | $ | 120,000 |
Total stockholders equity | $ | 320,000 | $ | 340,000 |
Total liabilities and stockholders equity | $ | 450,000 | $ | 460,000 |
This Year | ||
Sales (all on account) | $ | 700,000 |
Cost of goods sold | $ | 400,000 |
Gross margin | $ | 300,000 |
Net operating income | $ | 140,000 |
Interest expense | $ | 8,000 |
Net income | $ | 92,400 |
1. What is the return on total assets (assuming a 30% tax rate)? (Round percentage answer to 1 decimal place. i.e., 0.123 should be considered as 12.3%)
2. What is the return on equity? (Round your answer to the nearest whole percentage place. i.e., 0.1234 should be considered as 12%)
3. What is the book value per share at the end of this year? (Round your answer to 2 decimal places.)
4. What is the average collection period? (Use 365 days in a year. Round your intermediate and final answers to 2 decimal places.)
5. What is the equity multiplier? (Round your answer to 2 decimal places.)
6. What is the debt-to-equity ratio at the end of this year? (Round your answer to 2 decimal places.)
7. What is the times interest earned ratio? (Round your answer to 1 decimal place.)
8. What is the total asset turnover? (Round your answer to 2 decimal places.)
9. What is the companys operating cycle? (Round your intermediate and final answers to 2 decimal places.)
10. What is the average sale period? (Use 365 days in a year. Round your intermediate and final answers to 2 decimal places.)
Please Answer all the questions.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started