Problem 13-23A Ratio analysis LO 3-2, 13-3, 3-4, 13-5 The following financial statements apply to Zachary Company Year 4 Year 3 $211,100 $176,990 8,800 6,600 219,900 183,500 124,700 20,800 10,600 1,100 20,000 177,200 $ 42,700 102,30 18,800 9,680 1,180 16,700 148,500 35,880 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 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 (47,680 shares) Retained earnings Total stockholder's equity Total 11 abilities and stockholders equity $ 5,500 $ 6,360 2,400 2,480 36,899 31,100 101,989 94,500 4,888 3,888 150,600 138,100 105,280 105,200 21,880 $277,689 $243,380 $ 39,800 $ 55,5ee 16,188 16,800 55.900 72,3ee 65,280 66,200 121,180 138,500 114,000 114,689 42.. see 19,28e) 156,588 184,888 3277,688 $243.300 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 $6.11 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.) 9. 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.) Your Year 3 % a. % b. % % % C. % Net margin Return on investment Return on equity Earnings per share Price-earnings ratio Book value d. e. times times f. Interest earned times times 9 h. i. j k. Working capital Current ratio Quick (acid-test) ratio Accounts receivable turnover Inventory turnover Debt-to-equity ratio Debt-to-assets ratio times times times 1 times m. n. % %
