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

The following financial statements apply to Vernon Company:

	Year 4				Year 3
Revenues
Net sales	$	210,400			$	176,900
Other revenues		8,500				5,900
Total revenues		218,900				182,800
Expenses
Cost of goods sold		124,400				101,900
Selling expenses		19,500				17,500
General and administrative expenses		10,200				9,200
Interest expense		2,700				2,700
Income tax expense		20,800				16,800
Total expenses		177,600				148,100
Net income	$	41,300			$	34,700
Assets
Current assets
Cash	$	5,100			$	6,700
Marketable securities		2,400				2,400
Accounts receivable		35,500				30,400
Inventories		102,000				95,200
Prepaid expenses		4,100				3,100
Total current assets		149,100				137,800
Plant and equipment (net)		105,800				105,800
Intangibles		20,400				0
Total assets	$	275,300			$	243,600
Liabilities and Stockholders Equity
Liabilities
Current liabilities
Accounts payable	$	38,300			$	55,700
Other		16,800				15,300
Total current liabilities		55,100				71,000
Bonds payable		65,400				66,400
Total liabilities		120,500				137,400
Stockholders equity
Common stock (45,000 shares)		113,600				113,600
Retained earnings		41,200				(7,400	)
Total stockholders equity		154,800				106,200
Total liabilities and stockholders equity	$	275,300			$	243,600

Year 3 Year 4 19.63 1 % 15.00 % 26.680% $ 0.92 Net margin Return on investment Return on equity Earnings per share Price-earnings ratio Book value Interest earned Working capital Current ratio Quick (acid-test) ratio Accounts receivable turnover Inventory turnover 19.62 % 14.24 % 32.67 % $ 0.77 7.96times 2.36 times $ 3.44 24.00 times $ 20.00 t $ 66,800 times 9 $ 94,000 2.71 0.78 5.93 X times 2.06 X times 0.78 2.10 0.59 5.82 times 1.86 X times 1.29 k. m. Debt-to-equity ratio 56 090 44 % Debt-to-assets ratio