Ratio Analysis Byers Company presents the following condensed income statement and condensed December 31 balance sheet: Income Statement Sales (net) $267,000 Less: Cost of goods sold $160,000 Operating expenses 62,000 Interest expense 11,000 Income taxes 10,000 Total expenses (243,000) Net income $24,000 Balance Sheet Cash $10,000 Current liabilities $40,000 Receivables (net) 22,000 Bonds payable, 10% 110,000 Inventory 56,000 Common stock, $10 par 100,000 Long-term investments 30,000 Additional paid-in capital 95,000 Property and equipment (net) 282,000 Retained earnings 55,000 Total Assets $400,000 Total Liabilities and Shareholders' Equity $400,000 Additional information: The company's common stock was outstanding the entire year. Dividends of $1.50 per share on the common stock were declared during the year. On December 31 common stock is selling for $20 per share. On January 1 the accounts receivable (net) balance was $24,000, total assets amounted to $380,000, and total shareholders' equity was $241,000. Of the company's net sales, 78% are on credit. The company operates on a 365-day business year. Required: On the basis of the preceding information, compute the following ratios for the Byers Company: (Round to two decimal places.) 1. Earnings per share: $fill in the blank 1 2. Gross profit margin: fill in the blank 2% 3. Operating profit margin: fill in the blank 3% 4. Net profit margin: fill in the blank 4% 5. Total asset turnover: fill in the blank 5 times 6. Return on assets (Round tax rate to the nearest whole percent in your intermediate calculations.) fill in the blank 6% 7. Return on common equity fill in the blank 7% 8. Receivables turnover (in days): (Round your intermediate calculation to two decimal places.) fill in the blank 8 days 9. Interest coverage: (in times) fill in the blank 9 times

Ratio Analysis Byers Company presents the following condensed income statement and condensed December 31 balance sheet: Income Statement Sales (net) $267,000 Less: Cost of goods sold $160,000 Operating expenses 62,000 Interest expense 11,000 Income taxes 10,000 Total expenses (243,000) Net income $24,000 Balance Sheet Cash $10,000 Current liabilities $40,000 Receivables (net) 22,000 Bonds payable, 10% 110,000 Inventory 56,000 Common stock, $10 par 100,000 Long-term investments 30,000 Additional paid-in capital 95,000 Property and equipment (net) 282,000 Retained earnings 55,000 Total Assets $400,000 Total Liabilities and Shareholders' Equity $400,000 Additional information: The company's common stock was outstanding the entire year. Dividends of $1.50 per share on the common stock were declared during the year. On December 31 common stock is selling for $20 per share. On January 1 the accounts receivable (net) balance was $24,000, total assets amounted to $380,000, and total shareholders' equity was $241,000. Of the company's net sales, 78% are on credit. The company operates on a 365-day business year. Required: On the basis of the preceding information, compute the following ratios for the Byers Company: (Round to two decimal places.) 1. Earnings per share: $fill in the blank 1 2. Gross profit margin: fill in the blank 2% 3. Operating profit margin: fill in the blank 3% 4. Net profit margin: fill in the blank 4% 5. Total asset turnover: fill in the blank 5 times 6. Return on assets (Round tax rate to the nearest whole percent in your intermediate calculations.) fill in the blank 6% 7. Return on common equity fill in the blank 7% 8. Receivables turnover (in days): (Round your intermediate calculation to two decimal places.) fill in the blank 8 days 9. Interest coverage: (in times) fill in the blank 9 times

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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Question

Ratio Analysis

Byers Company presents the following condensed income statement and condensed December 31 balance sheet:

Income Statement
Sales (net)		$267,000
Less:
Cost of goods sold	$160,000
Operating expenses	62,000
Interest expense	11,000
Income taxes	10,000
Total expenses		(243,000)
Net income		$24,000

Balance Sheet

Cash	$10,000	Current liabilities	$40,000
Receivables (net)	22,000	Bonds payable, 10%	110,000
Inventory	56,000	Common stock, $10 par	100,000
Long-term investments	30,000	Additional paid-in capital	95,000
Property and equipment (net)	282,000	Retained earnings	55,000
Total Assets	$400,000	Total Liabilities and Shareholders' Equity	$400,000

Additional information:

The company's common stock was outstanding the entire year.
Dividends of $1.50 per share on the common stock were declared during the year.
On December 31 common stock is selling for $20 per share.
On January 1 the accounts receivable (net) balance was $24,000, total assets amounted to $380,000, and total shareholders' equity was $241,000.
Of the company's net sales, 78% are on credit.
The company operates on a 365-day business year.

Required:

On the basis of the preceding information, compute the following ratios for the Byers Company:

(Round to two decimal places.)

1. Earnings per share:	$fill in the blank 1
2. Gross profit margin:	fill in the blank 2%
3. Operating profit margin:	fill in the blank 3%
4. Net profit margin:	fill in the blank 4%
5. Total asset turnover:	fill in the blank 5 times
6. Return on assets (Round tax rate to the nearest whole percent in your intermediate calculations.)	fill in the blank 6%
7. Return on common equity	fill in the blank 7%
8. Receivables turnover (in days): (Round your intermediate calculation to two decimal places.)	fill in the blank 8 days
9. Interest coverage: (in times)	fill in the blank 9 times

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