Required Calculate the following ratios for 2018 and 2019. Since 2017 numbers ar

Question

Required

Calculate the following ratios for 2018 and 2019. Since 2017 numbers are not presented, do not use averages when calculating the ratios for 2018. Instead, use the number presented on the 2018 balance sheet.

Net margin. (Round your answers to 2 decimal places.)

Return on investment. (Round your answers to 2 decimal places.)

Return on equity. (Round your answers to 2 decimal places.)

Earnings per share. (Round your answers to 2 decimal places.)

Price-earnings ratio (market prices at the end of 2018 and 2019 were $11.88 and $9.54, respectively). (Round your 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.)

Working capital.

Current ratio. (Round your answers to 2 decimal places.)

Quick (acid-test) ratio. (Round your answers to 2 decimal places.)

Accounts receivable turnover. (Round your answers to 2 decimal places.)

Inventory turnover. (Round your answers to 2 decimal places.)

Debt to equity ratio. (Round your answers to 2 decimal places.)

Debt to assets ratio. (Round your answers to the nearest whole percent.)

The following financial statements apply to Karl Company: 2019 Revenues Net sales Other revenues $420,000 350,000 10,000 360,000 16,000 436,000 Total revenues Expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense 252,000 42,000 22,000 6,000 42,000 364,00e 206,000 38,000 20,000 6,000 36,000 306,000 Total expenses Net income Assets Current assets $ 72,000 $ 54,000 $ 8,000 16,000 Marketable securities Accounts receivable Inventories Prepaid expenses 70,000 200,000 6,000 286,000 210,000 40,000 $536,000 64,000 192,000 4,000 278,000 210,000 Total current assets Plant and equipment (net) Intangibles Total assets Liabilities and Stockholders' Equity Liabilities 488,000 Current liabilities $ 80,000 $108,000 30,000 138,000 134,000 272,000 Accounts payable Other 34,00030 Total current liabilities Bonds payable Total 1iabilities 114,000 132,000 246,000 Stockholders' equity Common stock (100,000 shares) Retained earnings 230,000 60,000 230,000 14,000 290,000 216,000 $536,000 488,000 Total stockholders' equity Total liabilities and stockholders equity

Explanation / Answer

Note:- As the question has multiple parts I have answered first four parts.

Ratios 2019 2018 a Net Margin = Net Income /Net Sales *100 17.14% 15.43% (72000/420000) (54000/350000) b Return on Investment = Net Income/ Average total asset 14.06% 11.07% 72000/(536000+488000)*0.5 (54000/488000) 72000/512000 c Return on Equity =Net Income/ Average total Stockholders equity 28.46% 25.00% 72000/(290000+216000)*0.5] (54000/216000) 72000/253000 d Earnings per share = Net earnings available for common stock / Average number of outstanding common stock. $                                                       0.72 $                                   0.54 (72000/100000 shares) (54000/100000 shares)

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