Question 42 (24 points) The financial statements of Dobson Company appear below: DOBSON COMPANY Balance Sheet December 31, 2010 2010 Assets $70,000 Cash 30,000 ...100,000 100,000 Accounts receivable (net).... Inventory Property, plant and equipment (net).... Total assets Liabilities and stockholders' equity Accounts payable.... 500,000 $800,000 $20,000 80,000 .176,000 320,000 204.000 Bonds payable... Retained earnings. Total liabilities and stockholders' equity. $800,000 DOBSON COMPANY Income Statement For the Year Ended December 31, 2010 Net sales... Cost of goods sold.. Gross profit Expenses $720,000 396,000 99e $24,000 Interest expense... Selling expenses... . Administrative expenses... 80,000 118,000 222,000 Total expenses. 102,000 Income before income taxe. Income tax expense. 30,000 Net income $72,000 Additional information a. Cash dividends of $13,000 were declared and paid in 2010 b. Weighted-average number of shares of common stock outstanding during 2010 was 30,000 shares. c. Market value of common stock on December 31, 2010, was $42 per share. d. Assume that the accounts receivable and inventory balances represent the average balances maintained during the year and that net sales are all credit sales. Instructions: Compute the following ratios for Dobson Company for 2010. Show all computations. Computations Current ratio Receivables turnover Profit margin Price Earnings ratio 1. 2. 3. 4. D. vveigntea-average numper or snares or common stocK outstanaing auring zuiU was 30,000 shares. c. Market value of common stock on December 31, 2010, was $42 per share. d. Assume that the accounts receivable and inventory balances represent the average balances maintained during the year and that net sales are all credit sales. Instructions: Compute the following ratios for Dobson Company for 2010. Show all computations Computations 1. Current ratio... 2. Receivables turnover 3. Profit margin 4. Price Earnings ratio 5. Debt to total assets ratio 6. Earnings Per Share 7. Inventory Turnover