Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 63BE: Asset Efficiency Ratios Rumsford Inc.s financial statements for 2019 indicate the following account...
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Condensed balance sheet and income statement data for Jergan Corporation are presented here.
Jergan Corporation
Balance Sheets December 31 |
|||||||||
---|---|---|---|---|---|---|---|---|---|
2020
|
2019
|
2018
|
|||||||
Cash
|
$ 29,600 | $ 17,000 | $ 17,600 | ||||||
Accounts receivable (net)
|
50,600 | 44,300 | 48,300 | ||||||
Other current assets
|
90,300 | 94,500 | 64,500 | ||||||
Investments
|
55,000 | 70,000 | 44,700 | ||||||
Plant and equipment (net)
|
500,400 | 370,600 | 357,400 | ||||||
$ 725,900 | $ 596,400 | $ 532,500 | |||||||
Current liabilities
|
$ 85,400 | $ 79,800 | $ 69,900 | ||||||
Long-term debt
|
144,900 | 84,300 | 50,900 | ||||||
Common stock, $10 par
|
351,000 | 310,000 | 300,000 | ||||||
|
144,600 | 122,300 | 111,700 | ||||||
$ 725,900 | $ 596,400 | $ 532,500 |
Jergan Corporation
Income Statement For the Years Ended December 31 |
||||||
---|---|---|---|---|---|---|
2020
|
2019
|
|||||
Sales revenue
|
$ 737,000 | $ 605,800 | ||||
Less: Sales returns and allowances
|
39,700 | 30,300 | ||||
Net sales
|
697,300 | 575,500 | ||||
Cost of goods sold
|
425,500 | 370,000 | ||||
Gross profit
|
271,800 | 205,500 | ||||
Operating expenses (including income taxes)
|
188,124 | 147,950 | ||||
Net income
|
$ 83,676 | $ 57,550 |
Additional information:
1. | The market price of Jergan’s common stock was $ 7.00, $ 7.50, and $ 8.50 for 2018, 2019, and 2020, respectively. | |
2. | You must compute dividends paid. All dividends were paid in cash. |
(a)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
![(a)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout
ratio and debt to assets ratio to O decimal places, e.g. 18%. Round all other answers to 1 decimal place, eg. 6.8 or 6.8%.)
2019
2020
(1)
Profit margin
%
%
(2)
Gross profit rate
(3)
Asset turnover
times
times
(4)
Earnings per share
$
$
(5)
Price-earnings ratio
times
times
(6)
Payout ratio
%
(7)
Debt to assets ratio
%
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd6ac4a4e-fd30-42c7-97c1-7b46a254b0a6%2Fe32d56d1-5415-47e0-b347-befa69449892%2F4bsnsbt_processed.png&w=3840&q=75)
Transcribed Image Text:(a)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout
ratio and debt to assets ratio to O decimal places, e.g. 18%. Round all other answers to 1 decimal place, eg. 6.8 or 6.8%.)
2019
2020
(1)
Profit margin
%
%
(2)
Gross profit rate
(3)
Asset turnover
times
times
(4)
Earnings per share
$
$
(5)
Price-earnings ratio
times
times
(6)
Payout ratio
%
(7)
Debt to assets ratio
%
%24
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