Problem 13-23A Ratio analysis LO 13-2, 13-3, 13-4, 13-5 The following financial statements apply to Adams Company: Year 4 Year 3 $211,200 8,200 219,400 $176,500 6,000 182,500 Revenues Net sales Other revenues Total revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses 124,100 19,100 9,400 1,700 19,900 174,200 102,700 17,100 8,400 1,700 16,600 146,500 $ 45,200 $ 36,000 $ 5,400 2,100 35,900 101,600 4,300 149,300 105,700 21,000 $ 276,000 $ 7,300 2,100 30,700 96,000 3,300 139,400 105, 700 0 $245, 100 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 $ 39,200 15,000 54,200 64,400 118,600 $ 54,900 16,700 71,600 65,400 137,000 114,700 42,700 157,400 $276,000 114,700 (6,600) 108,100 $245,100 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 $5.98 and $4.84, 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.) 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 4 Year 3 % times times f. times times a. Net margin Return on investment Return on equity Earnings per share e. Price-earnings ratio Book value g. Interest earned h. Working capital i. Current ratio Quick (acid-test) ratio k. Accounts receivable turnover I. Inventory turnover m. Debt-to-equity ratio n. Debt-to-assets ratio times times times times