Tooner Corporation Tooner Corporation Income Statement Balance Sheet For Year ended December 31, 2011 December 31, 2011 Sales $805,000 Assets Cost of goods sold: Cash $18,500 Inventory, Dec 31, 2010 62,800 Temporary investments 20,400 Purchases 500,700 Accounts receivable, net 43,400 Goods available for sale 563,500 Notes receivable 8,800 Inventory, Dec 31, 2011 49,200 Inventory 49,200 Cost of good sold 514,300 Prepaid expenses 4,800 Gross profit from sales 290,700 Plant assets, net 272,100 Operating expenses 227,800 Total assets $417,200 Operating income 62,900 Interest expense 9,500 Liabilities and Owner's Equity Income before taxes 53,400 Accounts payable $40,700 Income taxes 15,720 Accrued wages payable 5,200 Net income $37,680 Income taxes payable 5,800 Long term note payable 95,000 Common shares, 160,000 160,000 Retained earnings 110,500 Total liabilities and shareholder's equity $417,200 Assume all sales were on credit.On the December 31, 2010 balance sheet, the assets totalled $360,600, common shares were $160,000 and retained earnings were $89,700 REQUIRED: Calculate the following: (a) Current ratio (d) merchandise turnover (h) profit margin (b) Acid-test ratio (e) days' sales in inventory (i) total asset turnover (c) day's sales uncollected (f) ratio of pledged assets to secured liabilities (j) return on total assets (g) times interest earned (k) return on common shareholder's equity Analysis component: Identify whether the ratio's calculated above compare favourably to the industry averages below: Current ratio 1.6:1 Times interest earned 50 times Acid-test ratio 1.1:1 Profit margin 14% Accounts receivable turnover 16 times Gross profit ratio 18% Day's sales uncollected 21 days Return on total assets 20% Merchandise turnover 5 times Return on common shareholder's equity 32.70% Day's sales in inventory 70 days Book value per common share $8.63 Total asset turnover 2.3 times Book value per preferred share $15.00 Accounts payable turnover 4 times Basic earnings per share $1.79 Debt ratio 35% Price-earnings per share $18.20 Equity ratio 65% Dividend yield $0.35 Pledged assets to secured liabilities 1.4:1