Question
Profitability Measures Computations Asset turnover $8,270,000 [($5,783,000 + $5,593,000) 2] Return on total assets ($796,380 + $127,000) [($6,607,000 + $6,417,000) 2] Return on stockholders equity
Profitability Measures | Computations |
Asset turnover | $8,270,000 [($5,783,000 + $5,593,000) 2] |
Return on total assets | ($796,380 + $127,000) [($6,607,000 + $6,417,000) 2] |
Return on stockholders equity | $796,380 [($4,077,000 + $3,873,150) 2] |
Return on common stockholders equity | ($796,380 $65,000) [($3,589,500 + $3,445,920) 2] |
Earnings per share on common stock | ($796,380 $65,000) 250,000 shares |
Price-earnings ratio | $35 $3.05 |
Dividends per share | $175,000 250,000 shares |
Dividend yield | $0.70 $35 |
Liquidity and Solvency MeasuresComputations
Working capital$3,093,000 $840,000
Ratio of fixed assets to long-term liabilities$2,690,000 $1,690,000
Accounts receivable turnover$8,270,000 [($714,000 + $740,000) 2]
Ratio of liabilities to stockholders' equity$2,530,000 $4,077,000
Number of days' sales in inventory[($1,072,000 + $1,100,000) 2] ($4,100,000 365)
Times interest earned ($983,100 + $127,000) $127,000
Current ratio$3,093,000 $840,000
Number of days' sales in receivables[($714,000 + $740,000) 2] ($8,270,000 365)
Inventory turnover$4,100,000 [($1,072,000 + $1,100,000) 2]
Quick ratio$1,866,000 $840,000
Use the following comparative income statement form to enter amounts you identify from the computations on the Liquidity and Solvency Measures panel and on the Profitability Measures panel. Compute any missing amounts and complete the horizontal analysis columns. Enter percentages as decimal amounts, rounded to one decimal place. When rounding, look only at the figure to the right of one decimal place. If < 5, round down and if 5, round up. For example, for 32.048% enter 32.0%. For 32.058% enter 32.1%
comparative income statement
1 |
| 20Y6 | 20Y5 | Amount Increase (Decrease) | Percentage Increase (Decrease) |
2 | Sales |
| $7,277,000.00 |
|
|
3 | Cost of goods sold |
| 3,444,000.00 |
|
|
4 | Gross profit |
| $3,833,000.00 |
|
|
5 | Selling expenses |
| $1,455,400.00 |
|
|
6 | Administrative expenses | 1,240,500.00 | 1,104,500.00 |
|
|
7 | Total operating expenses |
| $2,559,900.00 |
|
|
8 | Income from operations |
| $1,273,100.00 |
|
|
9 | Interest expense |
| 120,600.00 |
|
|
10 | Income before income tax |
| $1,152,500.00 |
|
|
11 | Income tax expense |
| 180,720.00 |
|
|
12 | Net income |
| $971,780.00 |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started