How to Create a M Inbo (1,050. T Linkedin Tutorial 1: CarMax! Job Search My Acco

Question

How to Create a M Inbo (1,050. T Linkedin Tutorial 1: CarMax! Job Search My Account Login u Google Restaurant.com o. Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) Average sale period p. Compute the times i nterest earned for Year 2. (Round your answer to 2 decimal places.) Times interest earned q. Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.) Debt-to-equity ratio References Worksheet ng Objective Lea pterpret financial ratos Problem 15-257 Lundberg Corporation s most recent balance sheet... Difficulty: 2 Medium

Explanation / Answer

a. Gross margin percentage = Gross margin / Net Sales * 100 = 516/ 1,370 * 100 = 37.7 %.

b. Earnings per share for common stock for year 2 = ( Net Income - Preferred Dividend ) / Outstanding common shares = $ ( 160 - 24) / 100 = $ 1.36

c. Price Earnings Ratio = Market Price per Share / Earnings per Share = $ 9.40 / $ 1.36 = 6.9 times.

j. Current ratio for Year 2 = Current Assets / Current Liabilities = 555 / 430 = 1.29 : 1

k. Acid -test Ratio = ( Cash + Accounts Receivable) / Current Liabilities = 390 / 430 = 0.9 : 1

l. Accounts Receivables Turnover = Sales / Average Accounts Receivable = 1,370 / 255 = 5.37 times

m. Average Collection Period = 365 / Accounts REceivable Turnover = 365 / 5.37 = 68.0 days

n. Inventory Turnover for Year 2 = Cost of Goods Sold / Average Inventory = 854 / 145 = 5.89 times

o. Average Sale Period = 365 / Inventory Turnover = 365 / 5.89 = 62.0 days

p. Times interest earned for Year 2 = Net Operating Income / Interest Expense = 263 / 35 = 7.51 times.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.