HAMES, INC. Balance Sheets December 31, 2017 and 2016 $63,000 57,000 285,000 Acc

Question

HAMES, INC. Balance Sheets December 31, 2017 and 2016 $63,000 57,000 285,000 Accounts recelvable Merchandise inventory 266,000 247 Total current assets 609,000S 5 09,000 375,000 195,000)180,000) 898,000 82,000 330,000 Plant and equipment Less: Accumulated depreciation Total assets Liabilities Short-term debt Accounts payable Other acorued liabilities $ 54,000 51,000 144,000 54.000 290,000S249,000 168,000 68,000 Total current liablities Long-serm debt Total liabiliies Stockholders Equity Common stock, no par, 200,000 shares authorized, 80,000 and 50,000 56,000 S346.0OOS 354 shares issued, respectively Relained eamings; Beginning balance 286.000 217.000 102,000 Net income for the year Dividands for the year Ending belance Total stocknolders equity Total labilies and Stockholdens equity $ 898.000 802,000 Required: a. Calculate Rol for 2017, b. Calculate ROE for 2017 Round your answer to decimal place.)

Explanation / Answer

a) Calculate ROI :-

= (Net Income / Avg. Total Assets)*100

= ($102000 / ((898000+802000)/2))*100

= ($102000 / $850000)*100

= 12%

b) Calculate ROE :-

= (Net Income / (Avg. Stockholders Equity))*100

= ($102000 / (($552000 + $448000)/2))*100

= ($102000 / $500000)*100

= 20.4%

c) Working Capital :-

= Current Assets - Current Liabilities

= $609000 - $290000

= $319000

d) Current Ratio :-

= Current Assets / Current Liabilities

= $609000 / $290000

= 2.1

e) Acid Test Ratio :-

= (Cash + Accounts Receivable) / Current Liabilities

= ($63000 + $285000) / $290000

= $348000 / $290000

= $1.2

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