Problem 13-23A (Algo) Ratio analysis LO 13-2, 13-3, 13-4, 13-5 The following financial statements apply to Zachary Company: 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 (41,000 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Year 2 $ 220,700 Year 1 $ 180,600 125,300 101,800 20,100 18,100 10,400 9,400 1,200 1,200 20,900 17,800 177,900 148,300 $ 42,800 $ 32,300 $ 5,200 $ 7,600 1,400 1,400 35,700 30,300 101,800 94,200 4,900 3,900 149,000 137,400 105,900 21,200 105,900 $ 276,100 $ 243,300 $ 39,300 $ 34,000 16,600 15,500 55,900 49,500 65,900 66,900 121,800 116,400 114,400 114,400 39,900 154,300 12,500 $ 276,100 126,900 $ 243,300 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 $6.07 and $4.79, 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.) J. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) I. 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.) a. Net margin b. Return on investment C. Return on equity Year 2 Year 1 96 % 96 96 96 % d. Earnings per share e. Price-earnings ratio times times f. Book value per share of common stock g. Times interest earned times times h. Working capital i. Current ratio