The following financial statements apply to Rundle Company: Year 4 Year 3 $210,000 8,900 218,900 $175, 200 5,000 180, 200 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 125,300 19, 200 9,500 1,600 19,300 174,900 101,000 17,200 8,500 1,600 16,300 144,600 Net income $ 44,000 $ 35,600 $ 5,300 1,200 35, 700 100, 100 3,900 146,200 105,900 21,600 $273,700 $ 7,900 1,200 30,500 94,600 2,900 137,100 105,900 $243,000 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 (40,000 shares) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 39, 300 16,700 56,000 65,700 121,700 $ 54,400 15,700 70, 100 66,700 136,800 113, 100 38,900 152,000 $273,700 113, 100 (6,900) 106, 200 $243,000 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 $6.13 and $4.83, 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.) 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. 20.95% 20.32% b. 16.07% 33.52% c. % % Net margin Return on investment Return on equity Earnings per share Price-earnings ratio Book value d. e. times times f. g. Interest earned times times h. Working capital i. Current ratio j. k. times times I. Quick (acid-test) ratio Accounts receivable turnover Inventory turnover Debt-to-equity ratio Debt-to-assets ratio times times m. n. % %
