Question
The following financial statements for Jordan Corporation should be used to calculate the following ratios. Jordan Corporation Balance Sheets December 31, 2016 and 2015 Assets
The following financial statements for Jordan Corporation should be used to calculate the following ratios.
Jordan Corporation Balance Sheets December 31, 2016 and 2015 | ||
Assets | ||
Current Assets: | ||
Cash | $ 250,000 | $ 275,000 |
Accounts Receivable | 400,000 | 450,000 |
Inventory | 600,000 | 500,000 |
Prepaid Expenses | 25,000 | 30,000 |
Total Current Assets | 1,275,000 | 1,255,000 |
Property, Plant and Equipment: | ||
Equipment | 1,000,000 | 900,000 |
Less Accumulated Depreciation | (200,000) | (175,000) |
Total Property, Plant and Equipment | 800,000 | 725,000 |
Total Assets | $ 2,075,000 | $ 1,980,000 |
Liabilities and Stockholders' Equity | ||
Current Liabilities: | ||
Accounts Payable | $ 430,000 | $ 400,000 |
Notes Payable | 100,000 | 80,000 |
Wages Payable | 30,000 | 20,000 |
Total Current Liabilities | 560,000 | 500,000 |
Long Term Liabilities: | ||
Notes Payable | 200,000 | 180,000 |
Bonds Payable | 150,000 | 200,000 |
Total Long Term Liabilities | 350,000 | 380,000 |
Total Liabilities | 910,000 | 880,000 |
Stockholders' Equity | ||
Common Stock | 500,000 | 500,000 |
Additional Paid in Capital | 100,000 | 100,000 |
Retained Earnings | 565,000 | 500,000 |
Total Stockholders' Equity | 1,165,000 | 1,100,000 |
Total Liabilities and Equity | $ 2,075,000 | $ 1,980,000 |
Jordan Corporation Income Statement Years Ended December 31, 2016 and 2015 | ||
Sales | $ 3,500,000 | $ 3,300,000 |
Cost of Goods Sold | 1,200,000 | 1,150,000 |
Gross Profit | 2,300,000 | 2,150,000 |
Operating Expenses | 1,800,000 | 1,700,000 |
Operating Income | 500,000 | 450,000 |
Interest Expense | 25,000 | 30,000 |
Income Before Taxes | 475,000 | 420,000 |
Income Taxes | 100,000 | 80,000 |
Net Income | $ 375,000 | $ 340,000 |
There are 100,000 shares outstanding at the end of both 2016 and 2015.
Market price per share on December 31, 2016 was $45.00 per share.
Company paid $100,000 in dividends during 2016.
Compute the following ratios:
Liquidity:
Working capital
Current ratio
Inventory turnover
Days in inventory
Accounts receivable turnover
Average collection period
Solvency:
Debt to assets ratio
Times interest earned
Profitability:
Earnings per share
Price earnings ratio
Gross profit ratio
Net profit margin ratio
Return on assets
Asset turnover
Dividend payout ratio
Return on common equity
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