Selected year-end financial statements of McCord Corporation follow. (All sales
ID: 2376474 • Letter: S
Question
Selected year-end financial statements of McCord Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2010, were inventory, $53,900; total assets, $189,400; common stock, $115,000; and retained earnings, $52,948.)
Selected year-end financial statements of McCord Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2010, were inventory, $53,900; total assets, $189,400; common stock, $115,000; and retained earnings, $52,948.)
Explanation / Answer
current ratio= current asset/current liability
=86934/33900=2.56
Acid test ratio= current asset-inventory-prepaid exp./current liability
= 56200/33900=1.658
Days sales uncollected=365/account receivable turnover
= 365/14.56= 25
Inventory turnover=COGS/avg. inventory
=297950/45025=6.617
Days sales in inventory=365/6.617=55 days
Debt to equity= total liability/shareholder equity
= 97300/151250=0.64
Times interest earned=EBIT/interest expense
52150/4100=12.72
Profit margin ratio=net income/sales
= 28694/448600=6.39%
Total asset turnover= sales/total asset
=448600/248550=1.8
Return on total asset= income/total asset
=28694/248550=0.1154 or 11.54%
Return on common stock=income/common stock
=28694/115000=0.2495 or 24.95%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.