Condensed balance sheet and income statement data for Jergan Corporation are presented here.Jergan CorporationBalance SheetsDecember 31 2020 2019 2018Cash $ 30,800 $ 17,600 $ 18,700 Accounts receivable (net) 50,500 44,200 47,100 Other current assets 89,600 94,900 63,900 Investments 55,300 71,000 45,100 Plant and equipment (net) 500,500 370,000 358,500 $726,700 $597,700 $533,300 Current liabilities $85,500 $79,800 $69,400 Long-term debt 144,300 84,100 50,300 Common stock, $10 par 348,000 316,000 304,000 Retained earnings 148,900 117,800 109,600 $726,700 $597,700 $533,300 Jergan CorporationIncome StatementFor the Years Ended December 31 2020 2019Sales revenue $738,000 $605,500 Less: Sales returns and allowances 39,100 29,900 Net sales 698,900 575,600 Cost of goods sold 425,600 367,000 Gross profit 273,300 208,600 Operating expenses (including income taxes) 182,443 151,040 Net income $ 90,857 $ 57,560 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. **Financial Ratios for 2019 and 2020**In order to evaluate a company's performance over two years, we can compute various financial ratios. Please compute the following ratios for 2019 and 2020. Follow the specific rounding instructions provided to ensure consistency and accuracy.Instructions:- **Asset turnover** and **Earnings per share**: Round to 2 decimal places (e.g., 1.65).- **Payout ratio** and **Debt to assets ratio**: Round to 0 decimal places (e.g., 18%).- All other answers: Round to 1 decimal place (e.g., 6.8 or 6.8%).### Financial Ratios| Ratio | 2019 | 2020 ||---------------------------|------|------|| (1) Profit margin | | || (2) Gross profit rate | | || (3) Asset turnover | | || (4) Earnings per share | $ | $ || (5) Price-earnings ratio | | || (6) Payout ratio | | || (7) Debt to assets ratio | | |### Ratio Descriptions1. **Profit Margin**: Measures the percentage of revenue that has turned into profit. This ratio indicates how well the company is controlling its costs and expenses relative to its sales.2. **Gross Profit Rate**: Shows the proportion of money left over from revenues after accounting for the cost of goods sold (COGS). This is a measure of a company's efficiency in producing its goods.3. **Asset Turnover**: Indicates how efficiently a company uses its assets to generate sales. This is calculated by dividing sales by average total assets.4. **Earnings per Share (EPS)**: Measures the amount of net income earned per share of stock outstanding. This is an important indicator of a company's profitability.5. **Price-Earnings (P/E) Ratio**: A ratio for valuing a company that measures its current share price relative to its per-share earnings.6. **Payout Ratio**: The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage.7. **Debt to Assets Ratio**: Indicates the proportion of a company's assets that are financed by debt. It is a measure of financial leverage and risk.These

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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 $ 30,800 $ 17,600 $ 18,700 Accounts receivable (net) 50,500 44,200 47,100 Other current assets 89,600 94,900 63,900 Investments 55,300 71,000 45,100 Plant and equipment (net) 500,500 370,000 358,500 $726,700 $597,700 $533,300 Current liabilities $85,500 $79,800 $69,400 Long-term debt 144,300 84,100 50,300 Common stock, $10 par 348,000 316,000 304,000 Retained earnings 148,900 117,800 109,600 $726,700 $597,700 $533,300 Jergan Corporation Income Statement For the Years Ended December 31 2020 2019 Sales revenue $738,000 $605,500 Less: Sales returns and allowances 39,100 29,900 Net sales 698,900 575,600 Cost of goods sold 425,600 367,000 Gross profit 273,300 208,600 Operating expenses (including income taxes) 182,443 151,040 Net income $ 90,857 $ 57,560 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.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q