The following financial statements apply to Rooney Company: Year 2 Year 1 Revenues $ 220,700 $ 182,200 Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense 125, 200 19,700 10,500 2,300 19,300 177,000 102,300 17,700 9,500 2,300 16,000 147,800 Total expenses Net income $ 43,700 $ 34,400 $ $ 5,300 2,100 36,300 100,400 3,600 147,700 106,500 20,800 $ 275,000 7,600 2,100 30, 200 94,100 2,600 136,600 106,500 0 $ 243,100 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' equity Common stock (44,000 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ $ 39,600 15,700 55,300 65,800 121,100 34,300 15,800 50, 100 66,800 116,900 113,800 40,100 153,900 $ 275,000 113,800 12,400 126, 200 $ 243,100 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 $5.98 and $4.94, 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. 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 2 Year 1 a. Net margin % % b. % % C. % % d. Return on investment Return on equity Earnings per share Price-earnings ratio Book value per share of common stock Times interest earned e. times times f. times times g. h. Working capital Current ratio i. j. Quick (acid-test) ratio Accounts receivable turnover k. times times I. times times Inventory turnover Debt-to-equity ratio m. n. Debt-to-assets ratio % %
