Looking for how to solve for these ratios-if you have step by step instructions,

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Looking for how to solve for these ratios-if you have step by step instructions, that would be awesome. Thank you!

Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 12% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013 2014 2013 Sales revenue Net income Interest expense Tax expense Dividends paid on common stock Dividends paid on preferred stock Total assets (year-end) Average total assets Total liabilities (year-end) Avg. total common stockholders' equity $9,927,000 $9,927,000 2,470,720 2,757,500 190,960 827,250 682,000 739,010 1,213,960 1,399,46 409,200 15,993,500 18,613,125 21,397,750 24,228,732 8,184,000 4,092,000 12,821,600 19,232,400 409,200 (a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, eg, 12.5% or 12.5.) (i) Return on assets (ii) Return on common stockholders' equity ii) Payout ratio (iv) Debt to assets ratio (v) Times interest earned times times

Explanation / Answer

Ratio Formula Basis 2014 Basis 2013 2014 2013 Return on assets Net Income / Average total Assets 2470720/21397750 2757500/24228732 11.5% 11.4% Return on Common Stcokholder equity (Net Income - Preferred Dividend) / Average Common Stcokholder equity (2470720 -409200)/12821600 (2757500-409200)/19232400 16.1% 12.2% Payout ratio Dividend on common stock / Net Income 1213960/2470720 1399464/2757500 49.1% 50.8% Debt to assets ratio Debt = Interest/ 12% (682000/12%)/15993500 +(190960/12%)/18613125 35.5% 8.5% Debt / Total assets Times Interest Earned EBIT / Interest +(2470720+682000+739010) / 682000 +(2757500+190960+827250) / 190960 5.7 19.8 EBIT = Net Income + Tax +Interest

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