172. The following data are taken from the balance sheet at the end of the current year. Determine the (a) working capital, (b) current ratio, and (c) acid-test ratio. Present figures used in your computations. Round ratios to the nearest tenth.
Accounts payable
$145,000
Accounts receivable
110,000
Accrued liabilities
4,000
Cash
80,000
Income tax payable
10,000
Inventory
140,000
Marketable securities
250,000
Notes payable, short-term
85,000
Prepaid expenses
15,000
173. The following data are taken from the financial statements:
Current
Preceding
Year
Year
Net sales
$3,600,000
$4,000,000
Cost of goods sold
2,000,000
2,700,000
Average monthly inventory
332,000
328,000
Inventory, end of year
372,000
347,000
(a)
Determine for each year (1) the inventory turnover and (2) the number of days’ sales in inventory.
(b)
Comment on the favorable and unfavorable trends revealed by the data.
174. The following data are taken from the financial statements:
Current
Preceding
Year
Year
Average accounts receivable (net)
$123,000
$ 95,000
Accounts receivable (net), end of year
129,012
87,516
Net sales on account
950,000
825,000
(a)
Assuming that credit terms on all sales are n/45, determine for each year (1) the accounts receivable turnover and (2) the number of days’ sales in receivables.
(b)
Comment on any significant trends revealed by the data.
175. From the following data, determine for the current year the (a) rate earned on total assets, (b) rate earned on stockholders’ equity, (c) rate earned on common stockholders’ equity, (d) earnings per share on common stock, (e) price-earnings ratio on common stock, and (f) dividend yield on common stock. Assume that the current market price per share of common stock is $27. (Present key figures used in your computations.)
Current
Preceding
Year
Year
Current assets
$ 735,000
$ 820,000
Property, plant, and equipment
1,500,000
1,400,000
Current liabilities
(non-interest-bearing)
150,000
140,000
Long-term liabilities, 12%
400,000
400,000
Preferred 10% stock
250,000
250,000
Common stock, $25 par
1,200,000
1,200,000
Retained earnings:
Beginning of year
230,000
160,000
Net income for year
85,000
155,000
Preferred dividends declared
(25,000)
(25,000)
Common dividends declared
(60,000)
(60,000)
176. The following information has been condensed from the December 31 balance sheets of Henry Co.:
2006
2005
Assets:
Current assets
$ 825,500
$ 674,300
Fixed assets (net)
1,473,600
1,275,300
Total assets
$2,299,100
$1,949,600
Liabilities:
Current liabilities
$ 313,500
$ 309,600
Long-term liabilities
703,000
545,000
Total liabilities
$1,016,500
$ 854,600
Stockholders’ equity
$1,282,600
$1,095,000
Total liabilities and
stockholders’ equity
$2,299,100
$1,949,600
(a)
Determine the ratio of fixed assets to long-term liabilities for 2006 and 2005.
(b)
Determine the ratio of liabilities to stockholders’ equity for 2006 and 2005.
(c)
Comment on the year-to-year changes for both ratios.
177. A company reports the following:
Net income
$125,000
Preferred dividends
$5,000
Average stockholders’ equity
$1,000,000
Average common stockholders’ equity
$700,000
Determine the (a) rate earned on stockholders’ equity, and (b) rate earned on common stockholders’ equity? Round your answer to one digit after the decimal place.
178. Selected data from the Conner Company are presented below:
Total assets
$1,500,000
Average assets
1,700,000
Net income
250,000
Net sales
1,400,000
Average common stockholders’ equity
1,000,000
Net cash provided by operating activities
275,000
Shares of common stock outstanding
10,000
InstructionsCalculate the profitability ratios that can be computed from the above information.
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