Question :
61. Hardister Corp.Hardister Corp. has the following information available from its : 1291643
61. Hardister Corp.Hardister Corp. has the following information available from its financial statements for 2012:
Balance sheet information:
Income statement information:
Assets
Current assets
$ 400,000
Sales (all on account)
$3,000,000
Long-term assets
600,000
Cost of goods sold
1,500,000
Total assets
$1,000,000
Salary expense
200,000
Miscellaneous expenses
400,000
Liabilities
Interest expense
100,000
Current liabilities
$ 200,000
Income before taxes
$ 800,000
Long-term liabilities
100,000
Income tax expense
300,000
Total liabilities
$ 300,000
Net income
$ 500,000
Stockholders’ Equity
Capital stock
$ 300,000
Retained earnings
400,000
Total Stockholders’ Equity
$ 700,000
Refer to the Hardister Corp. information above. Assuming Hardister had total assets at the end of 2011 of $800,000 and an income tax rate of 37.5 percent, what would be return on assets for 2012? (round to the nearest whole percent) A. 63%B. 43%C. 57%D. 59%
62. Hardister Corp.Hardister Corp. has the following information available from its financial statements for 2012:
Balance sheet information:
Income statement information:
Assets
Current assets
$ 400,000
Sales (all on account)
$3,000,000
Long-term assets
600,000
Cost of goods sold
1,500,000
Total assets
$1,000,000
Salary expense
200,000
Miscellaneous expenses
400,000
Liabilities
Interest expense
100,000
Current liabilities
$ 200,000
Income before taxes
$ 800,000
Long-term liabilities
100,000
Income tax expense
300,000
Total liabilities
$ 300,000
Net income
$ 500,000
Stockholders’ Equity
Capital stock
$ 300,000
Retained earnings
400,000
Total Stockholders’ Equity
$ 700,000
Refer to the Hardister Corp. information above. At the end of 2012, Hardister’s common stock was listed on the stock exchange as having a market price of $65 per share and there are 10,000 shares outstanding. Hardister has no preferred stock. What would be Hardister’s price earnings (P/E) ratio for 2012? (round to two decimal places) A. 7.69 to 1B. 12.31 to 1C. 1.30 to 1D. .77 to 1
63. Which of the following ratios would be the best measure of profitability? A. Current ratioB. Debt-to-equity ratioC. Times-interest-earned ratioD. Return on assets
64. Which of the following ratios would not be the best measure of profitability? A. Earnings per shareB. Debt-to-equity ratioC. Return on common stockholders’ equityD. Return on assets
65. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Performing a horizontal analysis on Grogan’s total assets shows that they have: A. increased by 93.46%.B. increased by 46.26%.C. increased by 86.07%.D. increased by 31.50%
66. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Converting the 2012 column into a common-size statement would show current assets as being: (round to two decimal places) A. 9.66 percent of long-term assets.B. 8.81 percent of total assets.C. 27.49 percent of net income.D. 133.33 percent of 2011’s current assets.
67. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Grogan’s working capital for 2012 is: A. $ 8,500.B. $ 31,500.C. $ 20,000.D. $147,000.
68. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Grogan’s current ratio for 2012 is: (round to two decimal places) A. 3.17.B. 1.11.C. .57.D. 1.74.
69. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Grogan’s ratio of cash flow from operations to current liabilities for 2012 is: (round to two decimal places) A. 5.45.B. 0.18.C. 0.29.D. 6.52.
70. Grogan Inc.Grogan Inc. had the following information available from its 2011 and 2012 financial statements:
Balance sheet information:
2011
2012
Current assets
$ 15,000
$ 20,000
Long-term assets
107,000
207,000
Total assets
$122,000
$227,000
Current liabilities
$ 16,000
$ 11,500
Long-term liabilities
40,000
60,000
Total liabilities
$ 56,000
$ 71,500
Common stock
$ 30,000
$71,750
Retained earnings
36,000
83,750
Total stockholders’ equity
$ 66,000
$155,500
Income statement information:
Income before interest and taxes
$ 50,000
$105,000
Interest expense
4,000
6,000
Tax expense
10,000
26,250
Net income
$ 36,000
$72,750
Other information:
Dividends paid to stockholders
$ 0
$25,000
Average income tax rate
20%
25%
Net cash flows from operations
$25,000
$75,000
Cash paid for acquisitions
$10,000
$85,000
Refer to the Grogan Inc. information above. Grogan’s debt-to-equity ratio for 2012 is: (round to two decimal places) A. 2.17.B. 0.46.C. 0.85.D. 0.31.
