Problem 13-23A (Algo) Ratio analysis LO 13-2, 13-3, 13-4, 13-5

The following financial statements apply to Baird Company:

	Year 2				Year 1
Revenues	$	219,100			$	182,900
Expenses
Cost of goods sold		125,300				102,500
Selling expenses		20,200				18,200
General and administrative expenses		10,400				9,400
Interest expense		1,400				1,400
Income tax expense		19,600				17,800
Total expenses		176,900				149,300
Net income	$	42,200			$	33,600
Assets
Current assets
Cash	$	4,200			$	6,700
Marketable securities		1,900				1,900
Accounts receivable		35,100				30,700
Inventories		100,200				94,700
Prepaid expenses		3,300				2,300
Total current assets		144,700				136,300
Plant and equipment (net)		105,500				105,500
Intangibles		21,300				0
Total assets	$	271,500			$	241,800
Liabilities and Stockholders Equity
Liabilities
Current liabilities
Accounts payable	$	38,700			$	35,300
Other		16,500				16,700
Total current liabilities		55,200				52,000
Bonds payable		64,000				65,000
Total liabilities		119,200				117,000
Stockholders equity
Common stock (47,000 shares)		113,900				113,900
Retained earnings		38,400				10,900
Total stockholders equity		152,300				124,800
Total liabilities and stockholders equity	$	271,500			$	241,800

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 $5.99 and $4.78, 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.) l. 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 Year 1 % % % % C. % % times times 9 times times a. Net margin b. Return on investment Return on equity d. Earnings per share e. Price-earnings ratio f. Book value per share of common stock 9. Times interest earned h Working capital i. Current ratio Quick (acid-test) ratio k. Accounts receivable turnover 1. Inventory turnover m Debt-to-equity ratio Debt-to-assets ratio times times times times n. %