Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio
Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:The financial statements of El Camino Company appear below:
EL CAMINO COMPANY
Comparative Balance Sheet
December 31,
Assets
Cash
Debt investments
Accounts receivable (net)
Inventory
Property, plant and equipment (net)
Total assets
Liabilities and stockholders' equity
Accounts payable
Short-term notes payable
Bonds payable
Common stock
Retained earnings
Total liabilities and stockholders' equity..
Net sales (all on credit)
Cost of goods sold
Gross profit
Expenses
EL CAMINO COMPANY
Income Statement
For the Year Ended December 31, 2021
Interest expense
Selling expenses
Administrative expenses
Total expenses
Income before income taxes
Income tax expense
Net income
2021
$ 25,000
20,000
50,000
140,000
170,000
$405.000
$ 25,000
40,000
75,000
160,000
105,000
$405.000
$11,000
30,000
20,000
2020
$ 40,000
60,000
30,000
C. The market price of common stock on December 31, 2021, was $16 per share.
d.
Net cash provided by operating activities for 2021 was $70,000.
170,000
200.000
$500.000
$ 30,000
90,000
160,000
145,000
75,000
$500.000
$360,000
184,000
176,000
61.000
115,000
35,000
$80.000
Ex. 238 (Cont.)
Additional information:
a. Cash dividends of $50,000 were declared and paid on common stock in 2021.
b. The weighted-average number of shares of common stock outstanding during 2021 was
50,000.

Transcribed Image Text:Instructions
Using the financial statements and additional information, compute the following ratios for the El
Camino Company for 2021. Show all computations.
Computations
1. Current ratio
2. Return on common stockholders' equity
3.
Price-earnings ratio
4.
Inventory turnover
5. Accounts receivable turnover
6.
Times interest earned
7.
Profit margin
8.
Days in inventory
9.
Payout ratio
10. Return on assets
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