The following financial statements apply to Robin Company. Calculate the followi
ID: 2415269 • Letter: T
Question
The following financial statements apply to Robin Company.
Calculate the following ratios for 2014 and 2015. When data limitations prohibit computing averages, use year-end balances in your calculations.
Return on investment. (Since 2013 numbers are not presented do not use averages when calculating the ratios for 2014. Instead, use the number presented on the 2014 balance sheet. Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
Return on equity. (Since 2013 numbers are not presented do not use averages when calculating the ratios for 2014. Instead, use the number presented on the 2014 balance sheet. Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
Earnings per share. (Round your answers to 2 decimal places.)
Price-earnings ratio (market prices at the end of 2014 and 2015 were $5.94 and $4.77, respectively). (Round intermediate calculations and final answers to 2 decimal places.)
Book value per share of common stock. (Round your answers to 2 decimal places.)
Times interest earned. (Exclude extraordinary income in the calculation as they cannot be expected to recur and, therefore, will not be available to satisfy future interest payments. Round your answers to 2 decimal places.)
Accounts receivable turnover. (Since 2013 numbers are not presented do not use averages when calculating the ratios for 2014. Instead, use the number presented on the 2014 balance sheet. Round your answers to 2 decimal places.)
Inventory turnover. (Since 2013 numbers are not presented do not use averages when calculating the ratios for 2014. Instead, use the number presented on the 2014 balance sheet. Round your answers to 2 decimal places.)
2015 2014 Revenues Net sales $ 210,000 $ 175,000 Other revenues 4,000 5,000 Total revenues 214,000 180,000 Expenses Cost of goods sold 126,000 103,000 Selling expenses 21,000 19,000 General and administrative expenses 11,000 10,000 Interest expense 3,000 3,000 Income tax expense 21,000 18,000 Total expenses 182,000 153,000 Earnings from continuing operations
before extraordinary items 32,000 27,000 Extraordinary gain (net of $3,000 tax) 4,000 0 Net income $ 36,000 $ 27,000 Assets Current assets Cash $ 4,000 $ 8,000 Marketable securities 1,000 1,000 Accounts receivable 35,000 32,000 Inventories 100,000 96,000 Prepaid expenses 3,000 2,000 Total current assets 143,000 139,000 Plant and equipment (net) 105,000 105,000 Intangibles 20,000 0 Total assets $ 268,000 $ 244,000 Liabilities and Stockholders’ Equity Liabilities Current liabilities Accounts payable $ 40,000 $ 54,000 Other 17,000 15,000 Total current liabilities 57,000 69,000 Bonds payable 66,000 67,000 Total liabilities 123,000 136,000 Stockholders’ equity Common stock (50,000 shares) 115,000 115,000 Retained earnings 30,000 (7,000 ) Total stockholders’ equity 145,000 108,000 Total liabilities and stockholders’ equity $ 268,000 $ 244,000
Explanation / Answer
or
2015 2014 a) Net margin 17.14 15.43 Net Income/Sales 36000/210000*100 27000/175000*100 c) return On Investment 14.06 11.07 Net Income/ Total assets 36000/((214000+244000)/2 27000/244000*100or
Return on Investment= gross profit/Cost of Good Sold 66.67 69.90 (210000-126000)/126000 (175000-103000)/103000 d) return On Equity 28.46 25.00 Net Income/ Avg. Stockholder equity 36000/((108000+145000)/2) 27000/108000*100 d) EPS 0.72 0.54 Net Income/Avg. No. Of shares outstanding 36000/50000 27000/50000 e) PE Ratio 6.63 11.00 Market price/EPS 4.77/.72 5.94/.54 f) Book value per share of common stock 2.90 2.16 Stock holder equity/Avg No.of Shares g) time Interest earned 18.67 16.00 EBIT/Interest (214000-126000-21000-11000)/3000 (180000-103000-19000-10000)/3000 Dear Student there are various sub parts I have answered a to gRelated Questions
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