The comparative financial statements for Chinook Company are below Income statement Sales revenue Cost of goods sold. Gross profit Operating expenses and interest expense Pretax income Income tax Net income Balance sheet Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities (no interest) Long-term liabilities (interest rate: 10%) Common stock ($5 par value, 6,400 shares outstanding) Retained earnings Total liabilities and stockholders' equity Year 2 Earnings per share ratio Current ratio Quick ratio Cash ratio $ 210,000 117,000 93,000 58,000 35,000 10,000 $25,000 $ 6,000 15,000 42,000 48,000 $ 111,000 $ 17,000 46,000 32,000 16,000 $ 111,000 Year 1 $ 172,000 102,000 70,000 54,000 16,000 5,000 $ 11,000 $ 8,000 19,000 35,000 40,000 $ 102,000 $ 18,000 46,000 32,000 6,000 $102,000 Assume that the stock price per share is $38 and that dividends in the amount of $8.50 per share were paid during Year 2. Comput the following ratios: Note: Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).
The comparative financial statements for Chinook Company are below Income statement Sales revenue Cost of goods sold. Gross profit Operating expenses and interest expense Pretax income Income tax Net income Balance sheet Cash Accounts receivable (net) Inventory Property and equipment (net) Total assets Current liabilities (no interest) Long-term liabilities (interest rate: 10%) Common stock ($5 par value, 6,400 shares outstanding) Retained earnings Total liabilities and stockholders' equity Year 2 Earnings per share ratio Current ratio Quick ratio Cash ratio $ 210,000 117,000 93,000 58,000 35,000 10,000 $25,000 $ 6,000 15,000 42,000 48,000 $ 111,000 $ 17,000 46,000 32,000 16,000 $ 111,000 Year 1 $ 172,000 102,000 70,000 54,000 16,000 5,000 $ 11,000 $ 8,000 19,000 35,000 40,000 $ 102,000 $ 18,000 46,000 32,000 6,000 $102,000 Assume that the stock price per share is $38 and that dividends in the amount of $8.50 per share were paid during Year 2. Comput the following ratios: Note: Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).
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
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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:The comparative financial statements for Chinook Company are below
Income statement
Sales revenue
Cost of goods sold
Gross profit
Operating expenses and interest expense
Pretax income
Income tax
Net income
Balance sheet
Cash
Accounts receivable (net)
Inventory
Property and equipment (net)
Total assets
Current liabilities (no interest)
Long-term liabilities (interest rate: 10%)
Common stock ($5 par value, 6,400 shares outstanding)
Retained earnings
Total liabilities and stockholders' equity
Year 2
Earnings per share ratio
Current ratio
Quick ratio
Cash ratio
$ 210,000
117,000
93,000
58,000
35,000
10,000
$ 25,000
$ 6,000
15,000
42,000
48,000
$ 111,000
$ 17,000
46,000
32,000
16,000
$ 111,000
Year 1
$ 172,000
102,000
70,000
54,000
16,000
5,000
$ 11,000
$ 8,000
19,000
35,000
40,000
$ 102,000
$ 18,000
46,000
32,000
6,000
$ 102,000
Assume that the stock price per share is $38 and that dividends in the amount of $8.50 per share were paid during Year 2. Compute
the following ratios:
Note: Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be
entered as 12.34).
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