Average common shares 10,000 Current liabilities $100,000 Capital expenditures $
ID: 2434413 • Letter: A
Question
Average common shares
10,000
Current liabilities
$100,000
Capital expenditures
$20,000
Net income
$ 21,000
Cash provided by operations
$28,000
Net sales
$150,000
Dividends paid
$5,000
Total liabilities
$105,000
Current assets
$150,000
Total assets
$175,000
Instructions: Compute the following:
(a) Current ratio.
(b) Working capital.
(c) Earnings per share.
(d) Debt to total assets ratio.
(e) Free Cash Flow
Average common shares
10,000
Current liabilities
$100,000
Capital expenditures
$20,000
Net income
$ 21,000
Cash provided by operations
$28,000
Net sales
$150,000
Dividends paid
$5,000
Total liabilities
$105,000
Current assets
$150,000
Total assets
$175,000
Explanation / Answer
Current ratio is current assets/current liabilities= 150,000/100,000= 1.5. Working capital is current assets- current liabilities = 150,000-100,000= 50,000. Earnings per share is net income/average common shares= 21,000/10,000= $2.10. Debt to total assets is liabilities/total assets= 100,000/175,000= .5714 Free cash flow would be cash provided by operations, less capital expenditures, less dividends paid 28,000-20,000-5,000= 3,000.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.