The following financial statements apply to Karl Company: Year 2 436,000 Year 1 360,000 252,000 42,000 22,000 6,000 42,000 364,000 $ 72,000 206,000 38,000 20,000 6,000 36,000 306,000 $ 54,000 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 $ 74,000 2,000 7 , 200,000 6,000 352, 21 , 40,000 $62, $ 84,000 2,000 64 , 192,00 4,000 346,000 21 , $556,000 Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Other Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock (100,000 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 80,000 34,000 114,000 132,000 246,000 $108,000 30,000 138,000 134,000 272,000 230,000 126,000 356,000 $602,000 230,000 54,000 284,000 $556,000 Required 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 $11.88 and $9,54, 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 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.) 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 2 16.51% 12.44% 22.50% 0.72 22.00 times Year 1 15.00% 9.71% 19.01% 0.54 $ $ $ 13.25 times a. Net margin b. Return on investment c. Return on equity d. Earnings per share e. Price-earnings ratio f. Book value per share of common stock g. Times interest earned h. Working capital i. Current ratio 1. Quick (acid-test) ratio k. Accounts receivable turnover 1. Inventory turnover m. Debt-to-equity ratio n. Debt-to-assets ratio times times times times times times % %
