Question

Use the following information from the current year financial statements of a company to calculate the ratios below:
(a) Current ratio.
(b) Accounts receivable turnover. (Assume the prior year's accounts receivable balance was $100,000.)
(c) Days' sales uncollected.
(d) Inventory turnover. (Assume the prior year's inventory was $50,200.)
(e) Times interest earned ratio.
(f) Return on common stockholders' equity. (Assume the prior year's common stock balance was $480,000 and the retained earnings balance was $128,000.)
(g) Earnings per share (assuming the corporation has a simple capital structure, with only common stock outstanding).
(h) Price earnings ratio. (Assume the company's stock is selling for $26 per share.)
(i) 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

Answer

This answer is hidden. It contains 1223 characters.