Problem 14-24A Ratio analysis LO 14-2, 14-3, 14-4, 14-5
ALLENDALE COMPANY Balance Sheets As of December 31 Year 4 Year 3 Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items $ 40,000 36,000 6,000 46,000 143,000 10,000 241,000 20,000 255,000 29,000 24 000 20,000 54,000 135,000 25,000 274,000 27,000 270,000 Total current assets Investments Plant (net) Land Total assets $600,000 $540,000 Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable $ 17,000 6,000 100,000 21,00015,000 121,000 113,800 151,800 100,000 Total current liabilities Noncurrent liabilities Bonds payable Other 100,000 27,000 132,000 127 000 248,000 32,000 Total noncurrent liabilities Total liabilities 283,800 Required Calculate the following ratios for Year 4 and Year 3. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 2. Instead, use the number presented on the Year 2 balance sheet. a. Working capital b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, Year 3, were $47,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $140,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) I. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets. (Round your answers to 2 decimal places.) n. Return on investment. (Round your answers to 2 decimal places.) o. Return on equity. (Round your answers to 2 decimal places.) p. Earnings per share. (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $11.75; Year 4, $12.50). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) Year 4 Year 3 a. Working capital b. Current ratio c. Quick ratio d. Receivables turnover e. Average days to collect accounts receivable f. Inventory turnover $ 122,200 $ 120,000 1.81 1.99 times days times days times days times days Average days to sell inventory h. Debt to assets ratio i. Debt to equity ratio j. Number of times interest earned k. Plant assets to long-term debt g. times times Net margin m. Asset turnover n. Return on investment o. Return on equity p. | Earnings per share per share per share per share per share Book value per share r. Price-earnings ratio s. Dividend yield
