Using the above financial statements for the Jackson Corporation, calculate the following ratios. a. Profitability ratios. Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Using the above financial statements for the Jackson Corporation, calculate the following ratios. a. Profitability ratios. Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Concept explainers
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:JACKSON CORPORATION
Income Statement
For the Year Ending December 31, 20X1
Sales (on credit)
Cost of goods sold
Gross profit
Selling and administrative expenses
Operating profit (EBIT)
Interest expense
Earnings before taxes (EBT)
Taxes
Earnings after taxes (EAT)
$ 2,067,000
1,323,000
$ 744,000
516,000*
$ 228,000
30, 100
Profit margin
Return on assets (investment)
Return on equity
$ 197,900
83,000
$ 114,900
*Includes $39,600 in lease payments.
Using the above financial statements for the Jackson Corporation, calculate the following ratios.
a. Profitability ratios.
Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.
Profitability Ratios
%
%
%
Transcribed Image Text:Assets
Current assets:
Cash
Marketable securities
Accounts receivable (net)
Inventory
Total current assets
Investments
Plant and equipment
Less: Accumulated depreciation
Net plant and equipment
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Notes payable
Accrued taxes
Total current liabilities
Long-term liabilities:
Bonds payable
Total liabilities
Stockholders' equity
Preferred stock, $ 50 par value
Common stock, $ 1 par value
Capital paid in excess of par
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
$ 611,000
272,000
$ 52,500
22,500
178,000
290,000
$ 543,000
66,200
339,000
$948,200
$ 95,100
78,700
12,000
$ 185,800
159,400
$ 345,200
$ 100,000
80,000
190,000
233,000
$ 603,000
$948,200
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Transcribed Image Text:d. Debt utilization ratios.
Note: Do not round intermediate calculations. Input your debt to total assets answer as a percent rounded to 2 decimal places.
Round your other answers to 2 decimal places.
Debt to total assets
Times interest earned
Fixed charge coverage
Debt Utilization Ratios
%
times
times
Transcribed Image Text:Receivable turnover
Average collection period
Inventory turnover
Fixed asset turnover
Total asset turnover
Current ratio
Quick ratio
Assets Utilization Ratios
c. Liquidity ratios.
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Liquidity Ratios
times
times
times
days
times
times
times
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