Question :
61. Hardister Corp. has the following information available from its financial : 1295723
61. Hardister Corp. has the following information available from its financial statements for 2008:
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 2007 of $800,000 and an income tax rate of 37.5 percent, what would be return on assets for 2008? (round to the nearest whole percent) A. 63%B. 43%C. 57%D. 59%
62. Hardister Corp. has the following information available from its financial statements for 2008:
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 2008, 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 2008? (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. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Performing a horizontal analysis on Grogan’s total assets shows that they have: A. increased by 97.18%.B. increased by 215.38%.C. increased by 115.38%.D. increased by 53.57%
66. Grogan Inc. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Converting the 2008 column into a common-size statement would show current assets as being: (round to two decimal places) A. 40.00 percent of long-term assets.B. 28.57 percent of total assets.C. 56.34 percent of net income.D. 266.67 percent of 2007’s current assets.
67. Grogan Inc. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Grogan’s working capital for 2008 is: A. $ 70,000B. $230,000C. $ 50,000D. $150,000
68. Grogan Inc. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Grogan’s current ratio for 2008 is: (round to two decimal places) A. 2.67B. 5.60C. .29D. 8.00
69. Grogan Inc. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Grogan’s cash flow from operations to current liabilities ratio for 2008 is: (round to two decimal places) A. 12.00B. 15.00C. 3.00D. 1.06
70. Grogan Inc. had the following information available from its 2007 and 2008 financial statements:
Balance sheet information:
2007
2008
Current assets
$ 30,000
$ 80,000
Long-term assets
100,000
200,000
Total assets
$130,000
$280,000
Current liabilities
$ 15,000
$ 10,000
Long-term liabilities
30,000
40,000
Total liabilities
$ 45,000
$ 50,000
Common stock
$ 60,000
$100,000
Retained earnings
25,000
130,000
Total stockholders’ equity
$ 85,000
$230,000
Income statement information:
Income before interest and taxes
$ 30,000
$200,000
Interest expense
3,000
8,000
Tax expense
2,000
50,000
Net income
$ 25,000
$142,000
Other information:
Dividends paid to stockholders
$ 0
$ 37,000
Average income tax rate
23%
26%
Net cash flows from operations
$ 25,000
$150,000
Cash paid for acquisitions
$ 10,000
$ 75,000
Refer to the Grogan Inc information above. Grogan’s debt-to-equity ratio for 2008 is: (round to two decimal places) A. .25B. .22C. .39D. .18
