Lesson 5 Assignment 2 Using the below data, complete the table and ratios for ea

Question

Lesson 5 Assignment 2 Using the below data, complete the table and ratios for each company. Company Company Company Company Data from Current Year Balance Sheet Data from current year Income Statement Sales Assets Cash $770,000 880 585,100 632 500 37,40057,400 13,000 24.300 Current notes receivable (trade) 9,100 .200 Income tax expense 162.200 210400 4.51 84.440132,500 Net income 5.000 290,000304,400 445,440$542,450 6.950 5.11 es Plant assets, net Total Assets Last Year Balance Sheet data Liabilities and Equity Accounts receivable Current notes receivable (trade) 0 $29,800$54,200 30800 101000 Merchandise Invent 55,600 398.000382,500 180,000 206,000 Long-term notes payableS0 Common Stock $5 par alue 180,000 206,000Total Assets Retained eamings 123.300142.150 Common stoc uitv 542 d5 Assume that each company paid cash dividends of $3.80 per share and each company's stock can be purchased at $75 per share

Explanation / Answer

Note: All answers have been rounded off to one decimal place in absence of any instructions regarding the same.

Company A Company B Accounts/Notes receivable turnover 20.2 times 14.8 times Sales / Average receivables 770000/38150 880200/59400 Average receivables (29800+0+37400+9100)/2 (54200+0+57400+7200)/2 Inventory turnover 8.4 times 5.3 times Cost of goods sold/Average inventory 585100/70020 632500/119950 Average inventory (55600+84440)/2 (107400+132500)/2 Days' sales inventory 43.5 days 68.9 days 365 days/Inventory turnover 365/8.4 365/5.3 Days' sales uncollected 18.1 days 24.7 days 365 days/Receivables turnover 365/20.2 365/14.8 Profit margin ratio 21.1 % 23.9 % Net income / Total revenues 162200/770000 210400/880200 Total asset turnover 1.8 times 1.9 times Sales / Average total assets 770000/421720 880200/462475 Average total assets (398000+445440)/2 (382500+542450)/2 Return on total assets 38.5 % 45.5 % Net income / Average total assets 162200/421720 210400/462475 Return on common stockholder's equity 55.8 % 65.0 % Net income / Average stockholders' equity 162200/290800 210400/323875 Average stockholders' equity (180000+98300+180000+123300)/2 (206000+93600+206000+142150)/2 Price-earnings ratio 16.6 times 14.7 times Market price/EPS 75/4.51 75/5.11 Dividend yield 5.1 % 5.1 % Dividends paid/Market price 3.80/75 3.80/75

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