Question
The following information has been taken from the financial statements of the Kane Corporation. Kane Corporation has only issued common shares. 7 Net income $
The following information has been taken from the financial statements of the Kane Corporation. Kane Corporation has only issued common shares. 7
Net income $ 60,000
Total assets, January 1, 2007 500,000
Total liabilities, December 31, 2007 175,000
Net sales 900,000
Interest expense 20,000
Current assets, December 31, 2007 175,000
Current liabilities, December 31, 2007 75,000
Income tax expense 25,000
Total assets, December 31, 2007 575,000
Shareholders' equity, January 1, 2007 300,000
Shareholders' equity, December 31, 2007 400,000
Common shares outstanding for 2007 100,000
Use the given data for the Kane Corporation to calculate the following ratios for 2007:
a) rate of return on total assets
b) rate of return on common shareholders' equity
c) rate of return on net sales
d) times-interest-earned ratio
e) debt ratio, December 31, 2007
f) current ratio, December 31, 2007
g) earnings per common share
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Financial Management Theory And Practice
Authors: Prasanna Chandra
10th Edition
9353166527, 978-9353166526
