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Problem 13-23A (Algo) Ratio analysis LO 13-2, 13-3, 13-4, 13-5 The following financial statements apply to Jordan Company: Year 2 Year 1 $ 220,500 $ 181,400 124,700 101,400 20,600 18,600 9,500 8,500 2,700 2,700 19,600 17,500 177, 100 148, 700 $ 43,400 $ 32,700 Revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Assets Current assets Cash Marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock (42,000 shares) Retained earnings Total stockholders' equity $ 4,400 $ 6,200 1,300 1,300 35,800 31,700 100,300 94,800 3,500 2,500 145,300 136,500 105,500 105,500 20,800 $ 271,600 $ 242,000 $ 40,000 $ 35, 100 16,400 15,200 56,400 50, 300 65,700 66,700 122, 100 117,000 114,900 34,600 149,500 114,900 10, 100 125,000 -- + Con A Ann WA WU 16,400 56,400 65,700 122, 100 15, 200 50, 300 66,700 117,000 Other Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock (42,600 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 114,900 114,900 34,600 10, 100 149,500 125,000 $ 271,600 $ 242,800 Required Calculate the following ratios for Year 1 and Year 2. Since opening balance numbers are not presented do not use averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 balance sheet. a. Net margin (Round your answers to 2 decimal places.) b. Return on investment (Round your answers to 2 decimal places.) c. Return on equity. (Round your answers to 2 decimal places.) d. Earnings per share. (Round your answers to 2 decimal places.) e. Price-earnings ratio (market prices at the end of Year 1 and Year 2 were $6.02 and $4.85, respectively). (Round your intermediate calculations and final answers to 2 decimal places.) f. Book value per share of common stock. (Round your answers to 2 decimal places.) g. Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and therefore, will not be available to satisfy future interest payments. (Round your answers to 2 decimal places.) h. Working capital I. Current ratio. (Round your answers to 2 decimal places.) 1. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) 1. Inventory turnover. (Round your answers to 2 decimal places.) m. Debt-to-equity ratio. (Round your answers to 2 decimal places.) n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) Year 2 19.68% 25.58% 31.62% 4.71 77.00 times Year 1 18.03% 21.86% 26.161% 7.72 47.00 times $ $ times a. Net margin b. Return on investment C. Return on equity d. Earnings per share e. Price-earnings ratio f. Book value per share of common stock g. Times interest earned h. Working capital i. Current ratio j. Quick (acid-test) ratio k. Accounts receivable turnover 1. Inventory turnover m. Debt-to-equity ratio n. Debt-to-assets ratio $ 88,900 2.58 times 86,200 2.71 times times times times % %