The comparative statements of Painter Tool Company are presented below. PAINTER
ID: 2420571 • Letter: T
Question
The comparative statements of Painter Tool Company are presented below.
PAINTER TOOL COMPANY
Income Statement
For the Years Ended December 31
2015
2014
PAINTER TOOL COMPANY
Balance Sheets
December 31
Assets
2015
2014
Liabilities and Stockholders’ Equity
All sales were on account.
Compute the following ratios for 2015. (Weighted-average common shares in 2015 were 58,100.) (Round Earnings per share, Current ratio and Acid-test ratio to 2 decimal places, e.g.1.65 or 1.65: 1, and all other answers to 1 decimal place, e.g. 6.8 or 6.8% .)
PAINTER TOOL COMPANY
Income Statement
For the Years Ended December 31
2015
2014
Net sales $1,819,180 $1,751,370 Cost of goods sold 1,012,060 989,790 Gross profit 807,120 761,580 Selling and administrative expense 511,000 482,000 Income from operations 296,120 279,580 Other expenses and losses Interest expense 18,630 14,540 Income before income taxes 277,490 265,040 Income tax expense 80,400 76,020 Net income $ 197,090 $ 189,020Explanation / Answer
EPS = (Net income - Preferred dividends) / number of shares outstanding Net income $ 197,090 Preferred dividends $ - Number of shares outstanding 58,100 (197090 - 0)/58100 $ 3.39 Return on common stockholders’ equity = (Net income - Preferred dividends ) / Average common Stockholder's equity Net income $ 197,090 Preferred dividends $ - Average common stockholder's equity = Begnning +Ending / 2 Beginning $ 464,280 Ending $ 568,920 Average common stockholder's equity = Begnning +Ending / 2 $ 516,600 ROE 38.15% Return on assets = Net income / Total average assets Net income $ 197,090 Total average Assets = beginning + ending / 2 Beginning $ 854,520 Ending $ 974,240 Average assets $ 914,380 ROA 21.55% Current ratio = Current assets / Current liabilities Current assets $ 370,190 Current liabilities $ 203,120 Current ratio 1.82 Acid test ratio = Cash + Accounts receivable + Short term investment / Current liabilities Cash $ 60,740 Accounts receivable $ 116,290 Short term investment $ 69,970 Current liabilities $ 203,120 Acid test ratio 1.22 Accounts receivable turnover = Net credit sales / Average Accounts receivble Net credit sales $ 1,819,180 Average account recivable = (Beginning + ending) / 2 Beginning $ 102,870 Ending $ 116,290 Average account recivable = (Beginning + ending) / 2 $ 109,580 Accounts receivable turnover 16.60 Inventory turnover = COGS / Average inventory COGS $ 1,012,060 Average inventory = Beginning + Closing / 2 Beginning $ 114,560 Closing $ 123,190 Average inventory $ 118,875 Inventory turnover 8.51 Times interest earned = EBIT / Interest Expenses EBIT $ 296,120 Interest expenses $ 18,630 Times interest earned 15.89 Asset turnover ratio = Sales / Total assets Sales $ 1,819,180 Total assets $ 974,240 Asset turnover ratio 1.87 Debt to total assets = (Short term debt + long term debt) / Total assets Short term debt $ 203,120 Long term debt $ 202,200 Total assets $ 974,240 Debt to total assets 41.60%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.