Ratios Compared with Industry Averages

Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firms performance for the most recent year. The following data are taken from the firms latest annual report:

	Dec. 31, 2020	Dec. 31, 2019
Quick assets	$675,000	$527,000
Inventory and prepaid expenses	397,000	337,000
Other assets	4,788,000	4,225,000
Total Assets	$5,860,000	$5,089,000
Current liabilities	$749,000	$589,000
10% Bonds payable	1,465,000	1,465,000
8% Preferred stock, $100 par value	480,000	480,000
Common stock, $10 par value	2,700,000	2,160,000
Retained earnings	466,000	395,000
Total Liabilities and Stockholders Equity	$5,860,000	$5,089,000

For 2020, net sales amount to $11,280,000, net income is $550,000, and preferred stock dividends paid are $42,000.

Calculate the following ratios for 2020:

1. Profit margin Round answer to one decimal place (ex: 0.144555 = 14.5%).

2. Return on assets Round answer to one decimal place (ex: 0.144555 = 14.5%). Answer

3. Return on common stockholders equity Round answer to one decimal place (ex: 0.144555 = 14.5%).

4. Quick ratio Round answer to two decimal places (ex: 1.34543 = 1.35). Answer

5. Current ratio Round answer to two decimal places (ex: 1.34543 = 1.35). Answer

6. Debt-to-equity ratio Round answer to two decimal places (ex: 1.34543 = 1.35).