Answer:
(1) 2.33 (2)11.42857 times (3) 31.9375 days (4) 3.846154 times (5) 87.6 days (6) 6.00 times (7) 15.75% (8) 1 times (9) 0.35 (10) 14%
Explanation:
Solution
(1) Current ratio:
Current Ratio = Current Asset / Current Liability = =140000/60000 = 2.33
(2) The return of common equity of stockholders:
Accounts receivable turnover ratio = the net credit sales/ average accounts receivable = $400000/$35000
11.42857 times
(3) Accounts collection period = 365/Accounts receivable turnover ratio
=365/11.42857
31.9375 days
(4) Test acid ratio:
The Inventory Ratio Turnover = Cost of Goods Sold/Average Inventory
= $2,50,000/$65000
3.846154 times
(5) Average day to sell inventory = Inventory/Cost of Sales *365
=60000/250000*365
87.6 days
(6) The interest earned times:
Times Interest Earned = (Income before taxes and interest)/interest expense
= ($90000+18000)/18000
= 6.00 times
(7)The Profit Margin = Net Income / Sales
= 63000/400000
=15.75%
(8) The asset Turnover = Sales or Revenues / Total Assets
= $400000/400000 = 1 times
(9) Debt to asset ration = Total Liability / Total asset
= $140000/$400000
=0.35
(10)The return on asset ratio = Net Income/Average total asset
= 63000/450000 =14%
Now,
The total current assets = total assets - Net property, plant, equipment = $400000-$260000 = $140000
The Total current liabilities = [accounts payable + notes payable] $20000 + 40000 = $60000
The Average Account Receivable = (Opening Debtors+Closing Debtors)/2 = ($30000+$40000)/2 = $35000
The Average Inventory = (Opening Inventory+Closing Inventory)/2 = ($70000+$60000)/2 = $65000
Long-term debt + Equity = Total liabilities and equity – Total current liabilities = $275.00 – 65 = $201.00
The Total liability = Accounts Payable+ Notes Payable+Bonds Payable = $20000+40000+80000 = 140000
The Average Total asset = (Total opening asset+ total closing asset)/2 = ($400000+$500000)/2 = $4,50,000
