Answer:
A. Current Ratio 3.66 times
B. Inventory turnover 4.47 times
C. Accounts receivable turnover 14.57 times
D. Earnings per share $7.72
E.Profit margin ratio 28.56%
F.Return on assets 81.82%
Explanation:
A. Computation for Current Ratio
Using this formula
Current Ratio=Total Current Assets/Total Current Liabilities
Where,
Total Current Assets
Cash $45,100
Receivables $96,200
Inventory $169,300
Prepaid Insurance $8,100
Total Current Assets $318,700
Total Current Liabilities
Notes payable (short-term) $50,300
Accounts Payable $31,700
Accrued liabilities $5,100
Total Current Liabilities $87,100
Let plug in the formula
Current Ratio=$318,700/$87,100
Current Ratio=3.66 times
Therefore Current Ratio is 3.66 times
B.Calculation to determine Inventory turnover
Using this formula
Inventory turnover=Cost of Goods Sold/Average Inventory
Where,
Cost of Goods Sold $830,100
Average Inventory =[($201,900 + $169,300)/2] Average Inventory= $185,600
Let plug in the formula
Inventory turnover=$830,100/$185,600
Inventory turnover = 4.47 times
Therefore Inventory turnover is 4.47 times
C. Calculation to determine the Accounts receivable turnover
Using this formula
Accounts receivable turnover=Net credit sales .
/Ending Receivables
Let plug in the formula
Accounts receivable turnover=$1,401,400/$96,200
Accounts receivable turnover = 14.57 times
Therefore Accounts receivable turnover =is 14.57 times
D. Calculation to determine Earnings per share:
Using this formula
Earnings per share=Earnings available to the common shareholders/Weighted average number of common shares
Where,
Earnings available to the common shareholders =
Net Income $400,200
Less: Preferred dividends $0
$400,200
Weighted average number of common shares = ($259,100/$5) 51,820
Let plug in the formula
Earnings per share =$400,200/51,820
Earnings per share = $7.72
Therefore Earnings per share is $7.72
E. Calculation to determine Profit margin ratio:
Net Income (a) $400,200
Net credit sales (b) $1,401,400
Profit margin ratio (a/b*100) 28.56%
Therefore Profit margin ratio is 28.56%
F. Calculation to determine Return on assets on December 31, 2020:
Net Income (a) $400,200
Total assets (b) $489,100
Return on assets (a/b*100) 81.82%
Therefore Return on assets is 81.82%
