Seven metrics The following data were taken from the financial statements of Woodwork Enterprises Inc. for the current fiscal year. Assuming that there are no intangible assets. Property, plant, and equipment (net) $1,661,100 Liabilities: Current liabilities $157,000 Mortgage note payable, 10%, ten-year note issued two years ago 791,000 Total liabilities $948,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) $1,422,000 Common stock, $10 par (no change during year) 1,422,000 Retained earnings: Balance, beginning of year $1,516,000 Net income 461,000 $1,977,000 Preferred dividends $28,440 Common dividends 52,560 81,000 Balance, end of year 1,896,000 Total stockholders' equity $4,740,000 Sales $14,320,600 Interest expense $115,784 Beginning-of-the-year amounts: Property, plant, and equipment (net) $ 2,844,000 Total assets 5,404,000 Retained earnings 1,516,000 Determine the following: (a) debt ratio, (b) ratio of fixed assets to long-term liabilities, (c) ratio of liabilities to stockholders’ equity, (d) asset turnover, (e) return on total assets, (f) return on stockholders’ equity, and (g) return on common stockholders' equity. Round to two decimal places. a. Debt ratio fill in the blank 1 % b. Ratio of fixed assets to long-term liabilities fill in the blank 2 c. Ratio of liabilities to stockholders’ equity fill in the blank 3 d. Asset turnover fill in the blank 4 e. Return on total assets fill in the blank 5 % f. Return on stockholders’ equity fill in the blank 6 % g. Return on common stockholders’ equity fill in the blank 7 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(answers to a, b, c)

Seven metrics

The following data were taken from the financial statements of Woodwork Enterprises Inc. for the current fiscal year. Assuming that there are no intangible assets.

Property, plant, and equipment (net)				$1,661,100
Liabilities:
	Current liabilities		$157,000
	Mortgage note payable, 10%, ten-year note issued two years ago		791,000
	Total liabilities				$948,000
Stockholders' equity:
	Preferred $2 stock, $100 par (no change during year)				$1,422,000
	Common stock, $10 par (no change during year)				1,422,000
Retained earnings:
	Balance, beginning of year	$1,516,000
	Net income	461,000	$1,977,000
	Preferred dividends	$28,440
	Common dividends	52,560	81,000
	Balance, end of year				1,896,000
Total stockholders' equity				$4,740,000
Sales				$14,320,600
Interest expense				$115,784
Beginning-of-the-year amounts:
	Property, plant, and equipment (net)				$ 2,844,000
	Total assets				5,404,000
	Retained earnings				1,516,000

Determine the following: (a) debt ratio, (b) ratio of fixed assets to long-term liabilities, (c) ratio of liabilities to stockholders’ equity, (d) asset turnover, (e) return on total assets, (f) return on stockholders’ equity, and (g) return on common stockholders' equity. Round to two decimal places.

a.	Debt ratio	fill in the blank 1 %
b.	Ratio of fixed assets to long-term liabilities	fill in the blank 2
c.	Ratio of liabilities to stockholders’ equity	fill in the blank 3
d.	Asset turnover	fill in the blank 4
e.	Return on total assets	fill in the blank 5 %
f.	Return on stockholders’ equity	fill in the blank 6 %
g.	Return on common stockholders’ equity	fill in the blank 7 %

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