Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following financial statements apply to Solomon Company: Year 2 Year 1 Revenues $ 219,700 $ 181,200 Expenses Cost of goods sold 125,100 102,400 Selling
The following financial statements apply to Solomon Company:
Year 2 | Year 1 | |
---|---|---|
Revenues | $ 219,700 | $ 181,200 |
Expenses | ||
Cost of goods sold | 125,100 | 102,400 |
Selling expenses | 19,100 | 17,100 |
General and administrative expenses | 9,600 | 8,600 |
Interest expense | 2,700 | 2,700 |
Income tax expense | 19,500 | 17,500 |
Total expenses | 176,000 | 148,300 |
Net income | $ 43,700 | $ 32,900 |
Assets | ||
Current assets | ||
Cash | $ 4,300 | $ 6,800 |
Marketable securities | 2,600 | 2,600 |
Accounts receivable | 36,800 | 31,900 |
Inventories | 201,000 | 197,000 |
Prepaid expenses | 3,500 | 2,500 |
Total current assets | 248,200 | 240,800 |
Plant and equipment (net) | 105,100 | 105,100 |
Intangibles | 20,500 | 0 |
Total assets | $ 373,800 | $ 345,900 |
Liabilities and Stockholders Equity | ||
Liabilities | ||
Current liabilities | ||
Accounts payable | $ 38,000 | $ 34,900 |
Other | 16,500 | 16,700 |
Total current liabilities | 54,500 | 51,600 |
Bonds payable | 46,800 | 65,500 |
Total liabilities | 101,300 | 117,100 |
Stockholders equity | ||
Common stock (49,000 shares) | 126,000 | 126,000 |
Retained earnings | 146,500 | 102,800 |
Total stockholders equity | 272,500 | 228,800 |
Total liabilities and stockholders equity | $ 373,800 | $ 345,900 |
Calculate the following ratios for Year 1 and Year 2. When data limitations prohibit computing averages, use year-end balances in your calculations.
- Net margin. (Round your answers to 2 decimal places.)
- Return on investment. (Round your answers to 2 decimal places.)
- Return on equity. (Round your answers to 2 decimal places.)
- Earnings per share. (Round your answers to 2 decimal places.)
- Price-earnings ratio (market prices at the end of Year 1 and Year 2 were $5.96 and $4.84, respectively). (Round your intermediate calculations and final answers to 2 decimal places.)
- Book value per share of common stock. (Round your answers to 2 decimal places.)
- Times interest earned. (Round your answers to 2 decimal places.)
- Working capital.
- Current ratio. (Round your answers to 2 decimal places.)
- Quick (acid-test) ratio. (Round your answers to 2 decimal places.)
- Accounts receivable turnover. (Round your answers to 2 decimal places.)
- Inventory turnover. (Round your answers to 2 decimal places.)
- Debt-to-equity ratio. (Round your answers to 2 decimal places.)
- Debt-to-assets ratio. (Round your answers to the nearest whole percent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started