Consider the following financial statement data for Hi-Tech Instruments: For the Year Ended December 31 (Thousands of Dollars, except Earnings per Share) Sales revenue $218,000 Cost of goods sold 133,000 Net income 16,300 Dividends 10,600 Earnings per share $4.15 HI-TECH INSTRUMENTS, INC. Balance Sheets (Thousands of Dollars) Current Year Prior Year Assets Cash $26,300 $26,000 Accounts receivable (net) 54,000 49,000 Inventory 47,500 51,700 Total Current Assets 127,800 126,700 Plant assets (net) 60,600 58,500 Other assets 23,600 21,800 Total Assets $212,000 $207,000 Liabilities and Stockholders’ Equity Notes payable—banks $14,000 $14,000 Accounts payable 30,500 26,700 Accrued liabilities 24,500 29,000 Total Current Liabilities 69,000 69,700 9% Bonds payable 48,000 48,000 Total Liabilities 117,000 117,700 Common stock 50,000 50,000 Retained earnings 45,000 39,300 Total Stockholders’ Equity 95,000 89,300 Total Liabilities and Stockholders’ Equity $212,000 $207,000 * $25.00 par value; 2,000,000 shares Industry Average Ratios for Competitors Quick ratio 1.3 Current ratio 2.4 Accounts receivable turnover 5.9 times Inventory turnover 3.5 times Debt‑to‑equity ratio 0.73 Gross profit percentage 42.8 percent Profit margin 4.5 percent Return on assets 7.6 percent Calculate the company's debt-to-equity ratio for the current year.Note: Round answers to two decimal places, when appropriate.Answer Compare the result to the industry average. The company's debt-to-equity ratio is Answer than the industry's average.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Related questions

Question

Consider the following financial statement data for Hi-Tech Instruments:

For the Year Ended December 31
(Thousands of Dollars, except Earnings per Share)
Sales revenue	$218,000
Cost of goods sold	133,000
Net income	16,300
Dividends	10,600
Earnings per share	$4.15

HI-TECH INSTRUMENTS, INC.
Balance Sheets
(Thousands of Dollars)	Current Year	Prior Year
Assets
Cash	$26,300	$26,000
Accounts receivable (net)	54,000	49,000
Inventory	47,500	51,700
Total Current Assets	127,800	126,700
Plant assets (net)	60,600	58,500
Other assets	23,600	21,800
Total Assets	$212,000	$207,000
Liabilities and Stockholders’ Equity
Notes payable—banks	$14,000	$14,000
Accounts payable	30,500	26,700
Accrued liabilities	24,500	29,000
Total Current Liabilities	69,000	69,700
9% Bonds payable	48,000	48,000
Total Liabilities	117,000	117,700
Common stock	50,000	50,000
Retained earnings	45,000	39,300
Total Stockholders’ Equity	95,000	89,300
Total Liabilities and Stockholders’ Equity	$212,000	$207,000

* $25.00 par value; 2,000,000 shares

Industry Average Ratios for Competitors
Quick ratio	1.3
Current ratio	2.4
Accounts receivable turnover	5.9	times
Inventory turnover	3.5	times
Debt‑to‑equity ratio	0.73
Gross profit percentage	42.8	percent
Profit margin	4.5	percent
Return on assets	7.6	percent