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

The following financial statements apply to Munoz Company:

	Year 4				Year 3
Revenues
Net sales	$	210,500			$	175,500
Other revenues		9,300				6,100
Total revenues		219,800				181,600
Expenses
Cost of goods sold		125,400				102,000
Selling expenses		19,700				17,700
General and administrative expenses		10,500				9,500
Interest expense		1,700				1,700
Income tax expense		19,700				17,600
Total expenses		177,000				148,500
Net income	$	42,800			$	33,100
Assets
Current assets
Cash	$	5,000			$	7,000
Marketable securities		2,100				2,100
Accounts receivable		36,500				30,400
Inventories		101,500				95,800
Prepaid expenses		3,400				2,400
Total current assets		148,500				137,700
Plant and equipment (net)		106,000				106,000
Intangibles		21,700				0
Total assets	$	276,200			$	243,700
Liabilities and Stockholders Equity
Liabilities
Current liabilities
Accounts payable	$	38,300			$	55,900
Other		15,100				16,100
Total current liabilities		53,400				72,000
Bonds payable		64,800				65,800
Total liabilities		118,200				137,800
Stockholders equity
Common stock (43,000 shares)		113,500				113,500
Retained earnings		44,500				(7,600	)
Total stockholders equity		158,000				105,900
Total liabilities and stockholders equity	$	276,200			$	243,700

Required Calculate the following ratios for Year 3 and Year 4. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 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 3 and Year 4 were $5.96 and $4.87, 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 4 Year 3 a. Net margin b. Return on investment c. Return on equity arnings per share e. Price-earnings ratio f. Book value g. Interest earned h. Working capital i. Current ratio j. Quick (acid-test) ratio k. Accounts receivable turnover I. nventory turnover m. Debt-to-equity ratio n Debt-to-assets ratio times times times times times times times times