8. Make an investment analysis for 1998 by computing: a. Equity Ratio b. Creditors Equity to Total Assets c. Book Value Per Share on Common Stock
8. Make an investment analysis for 1998 by computing: a. Equity Ratio b. Creditors Equity to Total Assets c. Book Value Per Share on Common Stock
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS
The following are the balance sheet and income statement data of PRT Company:
December 31
Balance Sheet Accounts
1997
1998
Cash
P30,000
P52,000
Marketable Securities
170,000
200,000
Accounts Receivable, net
100,000
200,000
Inventories
150,000
100,000
Machinery and Equipment, net
340,000
300,000
110,000
Land and Building, net
Goodwill
80,000
100,000
80,000
18,000
Deferred Charges
20,000
Notes Payable, Trade
20,000
30,000
122,000
158,000
Accounts Payable, Trade
Expenses Payable
12,000
8,000
500,000
450,000
100,000
100,000
Long-term Notes-Due 2008
15% Preferred Stock, P100 par
Common Stock, P10 par
Retained Earnings
200,000
200,000
50,000
100,000
1998 Income Statement Accounts
Sales
Sales Returns and Allowances
P1,050,000
50,000
100,000
Inventory, December 31, 1998
Inventory, December 31, 1997
150,000
Purchases
Selling Expenses
Administrative Expenses (including depreciation of P25,000)
550,000
80,000
120,000
50,000
52,500
Interest on Long-term Notes
Income Taxes, 35%
Additional Information:
1. Dividends paid on preferred stock
15,000
2. Dividends paid on common stock
32,500
18
3. Market price per share of common stock
8. Make an investment analysis for 1998 by computing:
a. Equity Ratio
b. Creditors Equity to Total Assets
c. Book Value Per Share on Common Stock
8](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58a53162-b1cb-487d-a869-0ab2c8eadd5e%2F41517a97-6861-4afc-85a9-250e2b0f0fd1%2F1x4pf8v_processed.png&w=3840&q=75)
Transcribed Image Text:FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS
The following are the balance sheet and income statement data of PRT Company:
December 31
Balance Sheet Accounts
1997
1998
Cash
P30,000
P52,000
Marketable Securities
170,000
200,000
Accounts Receivable, net
100,000
200,000
Inventories
150,000
100,000
Machinery and Equipment, net
340,000
300,000
110,000
Land and Building, net
Goodwill
80,000
100,000
80,000
18,000
Deferred Charges
20,000
Notes Payable, Trade
20,000
30,000
122,000
158,000
Accounts Payable, Trade
Expenses Payable
12,000
8,000
500,000
450,000
100,000
100,000
Long-term Notes-Due 2008
15% Preferred Stock, P100 par
Common Stock, P10 par
Retained Earnings
200,000
200,000
50,000
100,000
1998 Income Statement Accounts
Sales
Sales Returns and Allowances
P1,050,000
50,000
100,000
Inventory, December 31, 1998
Inventory, December 31, 1997
150,000
Purchases
Selling Expenses
Administrative Expenses (including depreciation of P25,000)
550,000
80,000
120,000
50,000
52,500
Interest on Long-term Notes
Income Taxes, 35%
Additional Information:
1. Dividends paid on preferred stock
15,000
2. Dividends paid on common stock
32,500
18
3. Market price per share of common stock
8. Make an investment analysis for 1998 by computing:
a. Equity Ratio
b. Creditors Equity to Total Assets
c. Book Value Per Share on Common Stock
8
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