Times interest earned ratio-accounts receivable turnover

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Reference no: EM13772757

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 profits 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

Reference no: EM13772757

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