Chapter 14, Problem 14.32BE

Calculate ratios (Learning Objective 4)

Thornton Corporation reported these figures:

14.3-88 Full Alternative Text

Thornton Corporation has 3,125,000 shares of common stock outstanding. Its stock has traded recently at $31,20 per share, You would like to gain a better understanding of Thornton Corporation’s financial position. Assume all sales are on credit. Calculate the following ratios for 2017 and interpret the results:

1. a. Inventory turnover
2. b. Days’ sales in receivables
3. c. Acid-test ratio
4. d. Times-interest-earned
5. e. Gross profit percentage
6. f. Operating income percentage
7. g. Return on stockholders’ equity
8. h. Earnings per share
9. i. Price/earnings ratio