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) $1,680,000 Liabilities: Current liabilities $168,000 Mortgage note payable, 10%, ten-year note issued two years ago 840,000 Total liabilities $1,008,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $1,008,000 Common stock, $10 par (no change during year) 1,008,000 Retained earnings: Balance, beginning of year $1,076,000 Net income 385,000 $1,461,000 Preferred dividends $40,320 Common dividends 76,680 117,000 Balance, end of year 1,344,000 Total stockholders' equity $3,360,000 Sales $12,242,500 Interest expense $96,267 Beginning-of-the-year amounts: Property, plant, and equipment (net) $ 2,184,000 Total assets 4,150,000 Retained earnings 1,076,000 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 % 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 % g. Return on common stockholders’ equity %

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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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)				$1,680,000
Liabilities:
	Current liabilities		$168,000
	Mortgage note payable, 10%, ten-year note issued two years ago		840,000
	Total liabilities				$1,008,000
Stockholders' equity:
	Preferred $4 stock, $100 par (no change during year)				$1,008,000
	Common stock, $10 par (no change during year)				1,008,000
Retained earnings:
	Balance, beginning of year	$1,076,000
	Net income	385,000	$1,461,000
	Preferred dividends	$40,320
	Common dividends	76,680	117,000
	Balance, end of year				1,344,000
Total stockholders' equity				$3,360,000
Sales				$12,242,500
Interest expense				$96,267
Beginning-of-the-year amounts:
	Property, plant, and equipment (net)				$ 2,184,000
	Total assets				4,150,000
	Retained earnings				1,076,000

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	%
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	%
g.	Return on common stockholders’ equity	%

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