The following financial statements apply to Franklin Company: Year 2 Year 1 Revenues $ 218,600 $ 180,500 Expenses Cost of goods sold 125,300 102,700 Selling expenses 19,800 17,800 General and administrative expenses 10,200 9,200 Interest expense 2,200 2,200 Income tax expense 20,800 16,400 Total expenses 178,300 148,300 Net income $ 40,300 $ 32,200 Assets Current assets Cash $ 5,500 $ 7,200 Marketable securities 2,600 2,600 Accounts receivable 35,700 31,600 Inventories 100,200
Calculate the following ratios for Year 1 and Year 2 . Since opening balance numbers are not presented do not use averages when calculating the ratios for Year 1. Instead, use the number presented on the Year 1 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 1 and Year 2 were $6.03 and $4.79, 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.) g. Times interest earned. (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.) 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.) The following financial statements apply to Franklin Company: \begin{tabular}{|c|c|c|c|c|} \hline & \multicolumn{2}{|r|}{ Year 2} & \multicolumn{2}{|r|}{ Year 1} \\ \hline Revenues & $ & 218,600 & $ & 180,500 \\ \hline \multicolumn{5}{|l|}{ Expenses } \\ \hline Cost of goods sold & & 125,300 & & 102,700 \\ \hline Selling expenses & & 19,800 & & 17,800 \\ \hline General and administrative expenses & & 10,200 & & 9,200 \\ \hline Interest expense & & 2,200 & & 2,200 \\ \hline Income tax expense & & 20,800 & & 16,400 \\ \hline Total expenses & & 178,300 & & 148,300 \\ \hline Net income & $ & 40,300 & $ & 32,200 \\ \hline \multicolumn{5}{|l|}{ Assets } \\ \hline \multicolumn{5}{|l|}{ Current assets } \\ \hline Cash & $ & 5,500 & $ & 7,200 \\ \hline Marketable securities & & 2,600 & & 2,600 \\ \hline Accounts receivable & & 35,700 & & 31,600 \\ \hline Inventories & & 100,200 & & 95,300 \\ \hline Prepaid expenses & & 4,700 & & 3,700 \\ \hline Total current assets & & 148,700 & & 140,400 \\ \hline Plant and equipment (net) & & 105,000 & & 105,000 \\ \hline Intangibles & & 20,300 & & \\ \hline Total assets & $ & 274,000 & $ & 245,400 \\ \hline \multirow{2}{*}{\multicolumn{5}{|c|}{\begin{tabular}{l} Liabilities \\ Current liabilities \end{tabular}}} \\ \hline & & & & \\ \hline Accounts payable & $ & 39,500 & $ & 35,300 \\ \hline other & & 15,000 & & 16,500 \\ \hline Total current liabilities & & 54,500 & & 51,800 \\ \hline Bonds payable & & 64,000 & & 65,000 \\ \hline Total liabilities & & 118,500 & & 116,800 \\ \hline \multicolumn{5}{|l|}{ Stockholders' equity } \\ \hline Common stock (49,000 shares) & & 113,200 & & 113,200 \\ \hline Retained earnings & & 42,300 & & 15,400 \\ \hline Total stockholders' equity & & 155,500 & & 128,600 \\ \hline Total liabilities and stockholders' equity & $ & 274,000 & $ & 245,400 \\ \hline \end{tabular}
