Question
Use the following information from the current year financial statements of a company to calculate the ratios below: Current ratio. Accounts receivable turnover. (Assume the
- Use the following information from the current year financial statements of a company to calculate the ratios below:
- Current ratio.
- Accounts receivable turnover. (Assume the prior year's accounts receivable balance was
$100,000.)
- Days' sales uncollected.
- Inventory turnover. (Assume the prior year's inventory was $50,200.)
- Times interest earned ratio.
- Return on common stockholders' equity. (Assume the prior year's common stock balance was
$480,000 and the retained earnings balance was $128,000.)
- Earnings per share (assuming the corporation only has common stock outstanding).
- Price earnings ratio. (Assume the company's stock is selling for $26 per share.)
- Divided yield ratio. (Assume that the company paid $1.25 per share in cash dividends.)
Income statement data: |
|
Sales (all on credit) | $1,075,000 |
Cost of goods sold | 575,000 |
Gross profit on sales | $ 500,000 |
Operating expenses | 305,000 |
Operating income | $ 195,000 |
Interest expense | 20,400 |
Income before taxes | $ 174,600 |
Income taxes | 74,000 |
Net income | $ 100,600 |
|
|
Balance sheet data: |
|
Cash | $ 38,400 |
Accounts receivable | 120,000 |
Inventory | 56,700 |
Prepaid Expenses | 24,000 |
Total current assets | $ 239,100 |
Total plant assets | 708,900 |
Total assets | $ 948,000 |
Accounts payable | $ 91,200 |
Interest payable | 4,800 |
Long-term liabilities | 204,000 |
Total liabilities | $ 300,000 |
Common stock, $10 par | 480,000 |
Retained earnings | 168,000 |
Total liabilities and equity | $ 948,000 |
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