General Finance Selected financial data from the June 30 year-end statements of SaffordCompany are given below:Total assets$5,100,000Long-term debt (10% interest rate) $740,000Total stockholder's equity$2,200,000Interest paid on long-term debt$74,000Net income$410,000Total assets at the beginning of the year were $4,900,000; totalstockholders' equity was $2,000,000. The company's tax rate is 30%Required:1. Compute the return on total assets.2. Compute the return on equity.

Return on total assets = {net income+[(interest expense * (1-tax rate)]}/average total assets…

Answered: Selected financial data from the June…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 23MCQ

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Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.
Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of 75,000,000, and total assets of 169,000,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.
Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of 8,125,000, and total assets of 40,625,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
Selected financial data from the June 30 year-end statements of Safford Company are given below: Total assets $5,300,000 Long-term debt (9% interest rate) $ 730, 000 Total stockholders' equity $ 2,500,000 Interest paid on long-term debt $ 65,700 Net income $ 400,000 Total assets at the beginning of the year were $5, 100,000; total stockholders' equity was $2,300,000. The company's tax rate is 40%. Required: 1. Compute the return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 2. Compute the return on equity. (Round your percentage answer to 1 decimal place (i. e., 0.1234 should be entered as 12.3).) 3. Is financial leverage positive or negative?
Financial Accounting
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Line Item Description CurrentYear PreviousYear Accounts payable $184,000 $162,000 Current maturities of serial bonds payable 240,000 240,000 Serial bonds payable, 10% 1,190,000 1,430,000 Common stock, $1 par value 60,000 60,000 Paid-in capital in excess of par 590,000 600,000 Retained earnings 2,040,000 1,630,000 The income before income tax expense was $400,400 and $350,400 for the current and previous years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round your answers to one decimal place. Line Item Description Ratio Current year fill in the blank 1 Previous year fill in the blank 2 b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Line Item Description Ratio Current year fill in the blank 3 Previous year…
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Given the following information, what is the ratio of liabilities to stockholders’ equity?
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The comparative accounts payable and long-term debt balances for a company follow. Current Year Previous YearAccounts payable $114,240 $102,000Long-term debt 127,200 120,000 Based on this information, what is the amount and percentage of increase or decrease that wouldbe shown on a balance sheet with horizontal analysis?
WD Corporation reports the following year-end balance sheet data. The company's debt-to-equity ratio equals: Cash $ 42,000 Current liabilities $ 77,000 Accounts receivable 57,000 Long-term liabilities 28,000 Inventory 62,000 Common stock 102,000 Equipment 147,000 Retained earnings 101,000 Total assets $ 308,000 Total liabilities and equity $ 308,000

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