Answer:(a) 5.4 (b) 0.53, (c) 0.42, (d) 1.9 (e) 32.1 (f) 11.4 (g)17 (h) 21 (i) 3.4 (j) 3.7 (k) 41% (l) 86,000
Explanation:
(a) Earning per share = Total earning after tax / Number of shares
= Number of shares = 290,000 ÷ 5 = 58,000
= 313,400 ÷ 58,000 = 5.4
(b) Return on common stockholders equity
= Earning Available to ordinary equity /Total shareholders equity - preference shares
= 290,000/603,400 - 58,800
= 290,000 ÷ 544,600
= 0.53
(c) Return on Asset = Net income / Average Total Asset
= Average Total Asset = 1,026,900 ÷ 2 = 513,450
=218,000 ÷ 513,450
= 0.42
(d) Current Ratio = CurrentAsset ÷ Current Liabilities
= 377,900 ÷ 203,500
= 1.85
= 1.9 approximately
(e) Account Receivable Turnover = Annual credit sales ÷ Average Account Receivable
Average Account Receivable = 117,800 ÷ 2 = 58,900
= 1,890,540 ÷ 58,900
=32.09
= 32.1 approximately
(f) Average Collection Period = Average Account Receivable ÷ (Annual Sales ÷ 36365days )
=58,900÷ (1,890,540 ÷ 365)
= 58,900÷ 5,179.56
=11.37
= 11.4 approximately
(g) Inventory Turnover = Cost of good sold ÷ Average Inventory
Average inventory = 126,000 ÷ 2 = 63,000
1,058,540 ÷ 63,000 = 16.8
= 17 approximately
(h) Days in Inventory = 365 ÷ inventory turnover
= 365 ÷ 17 = 21.4
= 21
(i) Times interest earned = income before interest & income taxes ÷ interest expense
= 310,000 ÷ 92,000
= 3.36
= 3.4 approximately
(j) Asset Turnover = Net Sales ÷ Average Total Asset
Average Total Asset = 1,026,900 ÷ 2 = 513,450
= 1,890,540 ÷ 513,450
= 3.68
= 3.7 approximately
(k) Debt to Asset Ratio = Total Liabilities ÷ Total Asset × 100%
= 423,500 ÷ 1,026,900 × 100%
= 0.412 × 100
= 41.2%
= 41%
(l) Free cash flow = Cash from operating Activities - Capital Expenditure
=223,000 - 137,000
=86,000
