SURVEY OF ACCOUNT.(LL)-W/ACCESS>CUSTOM<
5th Edition
ISBN: 9781260222326
Author: Edmonds
Publisher: MCG CUSTOM
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Chapter 9, Problem 8E
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Brief Exercise 9-3 (Algo) Ratio analysis LO 9-3
The balance sheet for Alpha Corporation follows:
Current assets
Long-term assets (net)
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Common stock and retained earnings
Total liabilities and stockholders' equity
Debt-to-assets ratio
Debt-to-equity ratio
$998,000
1,508,000
2,506,000
Required:
Compute the debt-to-assets and debt-to-equity ratios using the provided balance sheet.
Note: Round your final answers to 1 decimal place.
%
704,000
1,104,000
1,808,000
698,000
$2,506,000
Exercise 15-20
Presented below is information from the annual report of Emporia Plastics, Inc.
Operating income
$532,150
Bond interest expense
135,000
397,150
Income taxes
183,432
Net income
$213,718
Bonds payable
$1,000,000
Common stock
875,000
Retained earnings
375,000
(a) Compute the return on common stockholders’ equity and the rate of interest paid on bonds. (Assume balances for debt and equity accounts approximate averages for the year.) (Round answers to 1 decimal place, e.g. 16.8%.)
Rate of return on common stock equity
%
Rate of interest paid on bonds payable
%
(b) Is Emporia Plastics, Inc. trading on the equity successfully?
Yes or No
please make sure the answer is correct 100%
Chapter 9 Solutions
SURVEY OF ACCOUNT.(LL)-W/ACCESS>CUSTOM<
Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Exercise 9-1 Horizontal analysis Winthrop...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Comprehensive analysis The December 31, 2019,...Ch. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Ratio analysis Compute the specified ratios using...Ch. 9 - Prob. 14ECh. 9 - LO 13-2, 13-3, 13-4, 13-5 Exercise 13-15A...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Problem 9-21 Ratio analysis Selected data for...Ch. 9 - Prob. 22PCh. 9 - Problem 9-23 Ratio analysis The following...Ch. 9 - Prob. 24PCh. 9 - Prob. 1ATCCh. 9 - Prob. 3ATCCh. 9 - ATC 9-5 Ethical Dilemma Making the ratios look...
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- RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem 24-8B. REQUIRED Calculate the following ratios and amounts for 20-1 and 20-2 (round all calculations to two decimal places). (a) Return on assets (Total assets on January 1, 20-1, were 111,325.) (b) Return on common stockholders equity (Total common stockholders equity on January 1, 20-1, was 82,008.) (c) Earnings per share of common stock (The average numbers of shares outstanding were 6,300 shares in 20-1 and 6,900 in 20-2.) (d) Book value per share of common stock (e) Quick ratio (f) Current ratio (g) Working capital (h) Receivables turnover and average collection period (Net receivables on January 1, 20-1, were 28,995.) (i) Merchandise inventory turnover and average number of days to sell inventory (Merchandise inventory on January 1, 20-1, was 32,425.) (j) Debt-to-equity ratio (k) Asset turnover (Assets on January 1, 20-1, were 111,325.) (l) Times interest earned ratio (m) Profit margin ratio (n) Assets-to-equity ratio (o) Price-earnings ratio (The market price of the common stock was 120.00 and 110.00 on December 31, 20-2 and 20-1, respectively.)arrow_forwardCommon stockholders' profitability analysis A company reports the following: Net income 1,000,000 Preferred dividends 50,000 Average stockholders' equity 6,250,000 Average common stockholders' equity 3,800,000 Determine (A) the return on stockholders equity and (B) the return on common stockholders' equity. (Round percentages to one decimal place.)arrow_forwardRATIO ANALYSIS OF COMPARATIVE FINANCIAL STATEMENTS Refer to the financial statements in Problem 24-8B. REQUIRED Calculate the following ratios and amounts for 20-1 and 20-2 (round all calculations to two decimal places). (a) Return on assets (Total assets on January 1, 20-1, were 111,325.) (b) Return on common stockholders equity (Total common stockholders equity on January 1,20-1, was 82,008.) (c) Earnings per share of common stock (The average numbers of shares outstanding were 6,300 shares in 20-1 and 6,900 in 20-2.) (d) Book value per share of common stock (e) Quick ratio (f) Current ratio (g) Working capital (h) Receivables turnover (Net receivables on January 1, 20-1, were 28,995.) (i) Merchandise inventory turnover (Merchandise inventory on January 1, 20-1, was 32,425.) (j) Debt-to-equity ratio (k) Asset turnover (Assets on January 1,20-1, were 111,325.) (l) Times interest earned ratio (m) Profit margin ratio (n) Assets-to-equity ratio (o) Price-earnings ratio (The market price of the common stock was 120.00 and 110.00 on December 31, 20-2 and 20-1, respectively.)arrow_forward
- Vertical Analysis of Balance Sheet Balance sheet data for Kwan Company on December 31, the end of two recent fiscal years, follow: Current Year Previous Year Current assets $355,300 $211,680 Property, plant, and equipment 543,400 509,600 Intangible assets 146,300 62,720 Current liabilities 188,100 94,080 Long-term liabilities 428,450 321,440 Common stock 104,500 109,760 Retained earnings 323,950 258,720 Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place. Kwan Company Comparative Balance Sheet For the Years Ended December 31 Current Current year year Amount Percent Previous Previous year year Amount Percent Current assets $355,300 $211,680 % Property, plant, and equipment 543,400 509,600 % Intangible assets % 146,300 62,720 % % %arrow_forwardKnowledge Check 01 Total Assets for a company are $700,000: Accounts Payable is $75,000, Bonds Payable is $225,000; Common Stock is $300,000 and Retained Earnings is $100,000. The common-size percent for Accounts Payable is 0933% 0933.3% - 10.7% - 100.7%arrow_forwardProblem 4 EINANCIAL RATIOS. The Format Company reports the following balance sheet data: Current liabilities $280.000 Bonds payable, 16% $120,000 Preferred stock, 14%, $100 par value $200,000 Common stock $25 par value, 16.800 shares $420.000 Paid-in capital on common stock $240,000 re Retained earnings $180,000 Income before taxes is $160,000. The tax rate is 40 percent. Common stockholders' equity in the previous year was $800,000. The market price per share of common stock is $35. Requirement: Calculate the following: a. Net incomne; t. Preferred dividends; t. Retu d Timec interect carnad: on Stock On comI E. Earings per Shar ingo g. Book value share. Price/Carm ratio and per data relative toarrow_forward
- Problem 4 EINANCIAL RATIOS. The Format Company reports the following balance sheet data: Current liabilities $280.000 Bonds payable, 16% $120,000 Preferred stock, 14%, $100 par value $200,000 Common stock $25 par value, 16.800 shares $420.000 Paid-in capital on common stock $240,000 re Retained earnings $180,000 Income before taxes is $160,000. The tax rate is 40 percent. Common stockholders' equity in the previous year was $800,000. The market price per share of common stock is $35. Requirement: Calculate the following: a. Net income%3B b. Preferred dividends; c. Return on common stock; d. Times interest earned; e. Earnings per share; f. Price/earnings ratio; and g. Book value per share. data relative toarrow_forwardProblem 4 EINANCIAL RATIOS. The Format Company reports the following balance sheet data: Current liabilities $280.000 Bonds payable, 16% $120,000 Preferred stock, 14%, $100 par value $200,000 Common stock $25 par value, 16.800 shares $420.000 Paid-in capital on common stock $240,000 re Retained earnings $180,000 Income before taxes is $160,000. The tax rate is 40 percent. Common stockholders' equity in the previous year was $800,000. The market price per share of common stock is $35. Requirement: Calculate the following: a. Net incomne; t. Preferred dividends; L, Return on common stock, d. Times interest earned; e. Earnings per share; f. Price/earnings ratio; and g. Book value per share. Pnol data relative toarrow_forwardProblem:arrow_forward
- Current Attempt in Progress Here is financial information for Sunland Inc. Current assets Plant assets (net) Current liabilities Long-term liabilities Common stock, $1 par Retained earnings December 31, 2022 $124,600 394,272 89,568 127,977 166,656 134,671 December 31, 2021 $100,000 333,000 72,000 87,000 112,000 162,000 Prepare a schedule showing a horizontal analysis for 2022, using 2021 as the base year. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)arrow_forward2arrow_forward16-17arrow_forward
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