Problem 18-03A a

Partially correct answer. Your answer is partially correct. Try again. Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergan Corporation Balance Sheets December 31 2020 2019 2018 Cash $ 29,400 $ 17,700 $ 18,000 Accounts receivable (net) 50,300 44,400 48,500 Other current assets 90,000 95,200 64,700 Investments 55,000 69,400 45,800 Plant and equipment (net) 500,600 370,000 357,600 $725,300 $596,700 $534,600 Current liabilities $85,900 $79,000 $70,600 Long-term debt 146,000 84,200 49,600 Common stock, $10 par 330,000 309,000 312,000 Retained earnings 163,400 124,500 102,400 $725,300 $596,700 $534,600

Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $736,000 $606,900 Less: Sales returns and allowances 40,900 30,600 Net sales 695,100 576,300 Cost of goods sold 426,300 371,000 Gross profit 268,800 205,300 Operating expenses (including income taxes) 185,388 147,670 Net income $ 83,412 $ 57,630

Additional information:

1. The market price of Jergans common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. 2. You must compute dividends paid. All dividends were paid in cash.

(a)

Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)

2019 2020 (1) Profit margin Entry field with incorrect answer 9.5 % Entry field with incorrect answer 11.3 % (2) Gross profit rate Entry field with incorrect answer 33.8 % Entry field with incorrect answer 36.5 % (3) Asset turnover Entry field with incorrect answer 101.71 times Entry field with incorrect answer 101.48 times (4) Earnings per share $Entry field with correct answer 1.87 $Entry field with incorrect answer 2.53 (5) Price-earnings ratio Entry field with correct answer 4.0 times Entry field with correct answer 3.4 times (6) Payout ratio Entry field with correct answer 62 % Entry field with correct answer 53 % (7) Debt to assets ratio Entry field with incorrect answer 39 % Entry field with incorrect answer 23 %