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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Condensed balance sheet and income statement data for Jergan Corporation are presented here.
Jergan Corporation
Balance Sheets
December 31
2020
2019
2018
Cash
$ 29,000
$ 16,000
$ 17,000
Accounts receivable (net)
49,000
44,000
47,000
Other current assets
89,000
94,000
63,000
Investments
54,000
69,000
44,000
Plant and equipment (net)
499,000
369,000
357,000
$720,000
$ 592,000
$ 528,000
Current liabilities
$84,000
$79,000
$69,000
Long-term debt
144,000
84,000
49,000
Common stock, $10 par
315,000
309,000
295,000
Retained earnings
177,000
120,000
115,000
$720,000
$ 592,000
$ 528,000
Jergan Corporation
Income Statement
For the Years Ended December 31
2020
2019
Sales revenue
$735,000
$ 605,000
Less: Sales returns and allowances
39,000
29,000
Net sales
696,000
576,000
Cost of goods sold
426,000
365,000
Gross profit
270,000
211.000
Operating expenses (including income taxes)
179,520
147,640
Net income
$ 90,480
$ 63,360
Additional information:
1.
2. You must compute dividends paid. All dividends were paid in cash.
The market price of Jergan's common stock was $7.00, $ 7.50, and $ 8.50 for 2018, 2019. and 2020, respectively.
(a)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, eg 1.65. Round payout
ratio and debt to assets ratio to O decimal places, eg 18%. Round all other answers to 1 decimal place, eg 6.8 or 6.8%)
2019
2020
Profit margin
Gross profit rate
* Asset turnover
times
times
Earnings per share
%24
%24
'Price-earnings ratio
times
times
Payout ratio
Debt to assets ratio
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