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a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.)

a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required Calculate the following ratios for Year 4 and Year 3. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 balance sheet. a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, Year 3, were $47,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $140,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) I. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets (average total assets in Year 3 is $540,000). (Round your answers to 2 decimal places.) n. Return on investment (average total assets in Year 3 is $540,000). (Round your answers to 2 decimal places.) o. Return on equity (average stockholders' equity in Year 3 is $292,000). (Round your answers to 2 decimal places.) p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $11.75; Year 4, $12.50). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) Year 4 Year 3 a. Working capital b. Current ratio C. Quick ratio d. Receivables turnover (beginning receivables at January 1, Year 3, were $47,000) e. Average days to collect accounts receivable f. Inventory turnover (beginning inventory at January 1, Year 3, was $140,000) g. Number of days to sell inventory h. Debt-to-assets ratio |i. Debt-to-equity ratio j. Number of times interest was earned |k. Plant assets to long-term debt |I. Net margin m. Turnover of assets (average total assets in Year 3 is $540,000) n. Return on investment (average total assets in Year 3 is $540,000) O. Return on equity (average stockholders' equity in Year 3 is $292,000) p. Earnings per share (total shares outstanding is unchanged) q. Book value per share of common stock r. Price-earnings ratio (market price per share: Year 3, $11.75; Year 4, $12.50) S. Dividend yield on common stock times days times days % times % % % per share per share % times days times days % times % % % per share per share %
Transcribed Image Text:Required Calculate the following ratios for Year 4 and Year 3. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 balance sheet. a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, Year 3, were $47,000). (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $140,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) j. Number of times interest was earned. (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) I. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets (average total assets in Year 3 is $540,000). (Round your answers to 2 decimal places.) n. Return on investment (average total assets in Year 3 is $540,000). (Round your answers to 2 decimal places.) o. Return on equity (average stockholders' equity in Year 3 is $292,000). (Round your answers to 2 decimal places.) p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $11.75; Year 4, $12.50). (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock. (Round your answers to 2 decimal places.) Year 4 Year 3 a. Working capital b. Current ratio C. Quick ratio d. Receivables turnover (beginning receivables at January 1, Year 3, were $47,000) e. Average days to collect accounts receivable f. Inventory turnover (beginning inventory at January 1, Year 3, was $140,000) g. Number of days to sell inventory h. Debt-to-assets ratio |i. Debt-to-equity ratio j. Number of times interest was earned |k. Plant assets to long-term debt |I. Net margin m. Turnover of assets (average total assets in Year 3 is $540,000) n. Return on investment (average total assets in Year 3 is $540,000) O. Return on equity (average stockholders' equity in Year 3 is $292,000) p. Earnings per share (total shares outstanding is unchanged) q. Book value per share of common stock r. Price-earnings ratio (market price per share: Year 3, $11.75; Year 4, $12.50) S. Dividend yield on common stock times days times days % times % % % per share per share % times days times days % times % % % per share per share %
Financial statements for Allendale Company follow: Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets. Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable Other Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings. Total stockholders' equity Total liabilities and stockholders' equity ALLENDALE COMPANY Statements of Income and Retained Earnings. For the Years Ended December 31 Year 4 Year 3 Revenues $230,000 8,000 $210,000 5,000 238,000 215,000 120,000 103,000 55,000 50,000 8,000 7,200 23,000 22,000 206,000 182,200 32,000 32,800 132,000 107,000 3,200 3,200 4,600 4,600 $156,200 $132,000 Sales (net) Other revenues Total revenues. Cost of goods sold Selling, general, and administrative Interest expense Income tax expense Total expenses Net earnings (net income) Retained earnings, January 1 Less: Preferred stock dividends Common stock dividends Retained earnings, December 31 Expenses ALLENDALE COMPANY Balance Sheets As of December 31 Year 4. Year 3 $ 36,000 $ 40,000 20,000 54,000 6,000 46,000 143,000 135,000 25,000 10,000 274,000 241,000 27,000 20,000 270,000 255,000 29,000 24,000 $600,000 $540,000 $ 17,000 113,800 21,000 $ 6,000 100,000 15,000 151,800 121,000 100,000 100,000 32,000 27,000 132,000 127,000 283,800 248,000 80,000 80,000 80,000 80,000 156,200 132,000 316,200 292,000 $600,000 $540,000
Transcribed Image Text:Financial statements for Allendale Company follow: Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets. Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities Bonds payable Other Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock, (par value $10, 4% cumulative, non-participating; 8,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings. Total stockholders' equity Total liabilities and stockholders' equity ALLENDALE COMPANY Statements of Income and Retained Earnings. For the Years Ended December 31 Year 4 Year 3 Revenues $230,000 8,000 $210,000 5,000 238,000 215,000 120,000 103,000 55,000 50,000 8,000 7,200 23,000 22,000 206,000 182,200 32,000 32,800 132,000 107,000 3,200 3,200 4,600 4,600 $156,200 $132,000 Sales (net) Other revenues Total revenues. Cost of goods sold Selling, general, and administrative Interest expense Income tax expense Total expenses Net earnings (net income) Retained earnings, January 1 Less: Preferred stock dividends Common stock dividends Retained earnings, December 31 Expenses ALLENDALE COMPANY Balance Sheets As of December 31 Year 4. Year 3 $ 36,000 $ 40,000 20,000 54,000 6,000 46,000 143,000 135,000 25,000 10,000 274,000 241,000 27,000 20,000 270,000 255,000 29,000 24,000 $600,000 $540,000 $ 17,000 113,800 21,000 $ 6,000 100,000 15,000 151,800 121,000 100,000 100,000 32,000 27,000 132,000 127,000 283,800 248,000 80,000 80,000 80,000 80,000 156,200 132,000 316,200 292,000 $600,000 $540,000
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