Solution-Compute the return on common stockholders equity

Compute the return on common stockholders equity ratios

Assignment Help Financial Accounting

Reference no: EM13887650

The comparative statements of Larker Tool Company are presented below.

Larker Tool Company Income Statement For the Years Ended December 31
	2014	2013
Net sales	$1,818,500	$1,750,500
Cost of goods sold	1,011,500	996,000
Gross profit	807,000	754,500
Selling and administrative expense	516,000	479,000
Income from operations Other expenses and losses	291,000	275,500
Interest expense	15,000	14,000
Income before income taxes	276,000	261,500
Income tax expense	84,000	77,000
Net income	$ 192,000	$ 184,500

Larker Tool Company Balance Sheets December 31
Assets	2014	2013
Current assets Cash	$ 60,100	$ 64,200
Short-term investments	69,000	50,000
Accounts receivable (net)	105,750	102,800
Inventory	110,950	115,500
Total current assets	345,800	332,500
Plant assets (net)	600,300	520,300
Total assets	$946,100	$852,800
Liabilities and Stockholders' Equity
Current liabilities Accounts payable	$160,000	$145,400
Income taxes payable	43,500	42,000
Total current liabilities	203,500	187,400
Bonds payable	200,000	200,000
Total liabilities	403,500	387,400
Stockholders' equity Common stock ($5 par)	300,000	300,000
Retained earnings	242,600	165,400
Total stockholders' equity	542,600	465,400
Total liabilities and stockholders' equity	$946,100	$852,800

All sales were on account.

Instructions

Compute the following ratios for 2014. (Weighted-average common shares in 2014 were 60,000.)

(a) Earnings per share.

(b) Return on common stockholders' equity.

(d) Current.

(e) Acid-test.

(f) Receivables turnover.

(g) Inventory turnover.

(h) Times interest earned.

(i) Asset turnover.

(j) Debt to total assets.

Reference no: EM13887650

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Compute the return on common stockholders equity ratios

Reference no: EM13887650

Reference no: EM13887650

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