The following financial statements apply to Adams Company: Year 4 Year 3 $ 210,100 8, 100 218, 200 $176,500 5,200 181,700 124,500 19,500 10,400 2,200 19,400 176,000 $ 42,200 102,000 17,500 9,400 2,200 17,200 148,300 $ 33,400 Revenues Net sales Other revenues Total revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense Total expenses Net income Assets Current assets Cash Marketable securities Accounts receivable Inventories Prepaid expenses Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities Stockholders eauity $ 4,900 1,800 36,800 101,800 4,800 150, 100 105,500 21,200 $276,800 6,700 1,800 31,700 95,500 3,800 139,500 105,500 $245,000 $ 39,400 16,400 55,800 64,200 120,000 $ 54,300 15,400 69, 700 65,200 134,900 120,000 134,900 Total liabilities Stockholders' equity Connon stock (41,000 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 113,200 43,600 156, 800 $276,800 113,200 (3,100) 110,100 $245,000 Required Calculate the following ratios for Year 3 and Year 4. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 balance sheet. a. Net margin. (Round your answers to 2 decimal places.) b. Return on investment. (Round your answers to 2 decimal places.) c. Return on equity. (Round your answers to 2 decimal places.) d. Earnings per share. (Round your answers to 2 decimal places.) e. Price earnings ratio (market prices at the end of Year 3 and Year 4 were $6.07 and $4.78, respectively). (Round your intermediate calculations and final answers to 2 decimal places.) f. Book value per share of common stock. (Round your answers to 2 decimal places.) 9. Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and therefore, will not be available to satisfy future interest payments. (Round your answers to 2 decimal places.) h. Working capital i. Current ratio. (Round your answers to 2 decimal places.) j. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) 1. Inventory turnover. (Round your answers to 2 decimal places.) m. Debt-to-equity ratio. (Round your answers to 2 decimal places.) n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) Year 3 Year 4 % Saved Probi 1. Current ratio. (Round your answers to 2 decimal places.) j. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) I. Inventory turnover (Round your answers to 2 decimal places.) m. Debt-to-equity ratio. (Round your answers to 2 decimal places.) n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) Year 4 Year 3 a % % b % % C % % Net margin Return on investment Return on equity Earnings per share Price-earnings ratio Book value d. e. times times f. times times 9 Interest earned h Working capital i. Current ratio i Quick (acid-test) ratio Ik. Accounts receivable turnover L Inventory turnover m. Debt-to-equity ratio Debt-to-assets ratio times times times times Els % %
