xercise 92 The following data is given: Compute the following ratios: (Round ans
ID: 2813269 • Letter: X
Question
xercise 92
The following data is given:
Compute the following ratios: (Round answers to 2 decimal places e.g. 15.25.)
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December 31, 2015 2014 Cash $66,500 $50,500 Accounts receivable (net) 91,000 59,000 Inventories 91,000 111,000 Plant assets (net) 381,500 321,000 Accounts payable 54,500 40,000 Salaries and wages payable 10,000 4,500 Bonds payable 69,000 69,500 8% Preferred stock, $40 par 100,000 100,000 Common stock, $10 par 120,000 90,000 Paid-in capital in excess of par 80,000 70,000 Retained earnings 196,500 167,500 Net credit sales 930,000 Cost of goods sold 705,000 Net income 81,000Explanation / Answer
a) Acid-test ratio at 12/31/15 Quick assets/Current liabilities 2.44 =(66500+91000)/(54500+10000) b) Accounts receivable turnover in 2015 Sales/Average accounts receivable 12.40 =930000/((91000+59000)/2) c) Inventory turnover in 2015 Cost of goods sold/Average inventory 6.98 =705000/((91000+111000)/2) d) Profit margin on sales in 2015 Net income/Net sales 8.71% =81000/930000 e) Return on common stock equity in 2015 Net income/Total equity 20.43% =81000/(120000+80000+196500) f) Book value per share of common stock at 12/31/15 Total equity/Number of shares $ 33.04 =(120000+80000+196500)/12000
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