Question

Using the Assessment 5, Part 1 Template, analyze and compute the necessary financial ratios. The Financial Statements worksheet in the template contains the income statement, balance sheets, and additional information needed. The Ratio Analysis worksheet contains space for your calculations and answers.

Net sales (all on account)				$600,000	$520,000							Assets
Expenses:												Current Assets
Cost of Goods Sold				$415,000	$354,000							Cash					$21,000	$18,000
Selling and administrative				$120,800	$114,600							Short-term investments					$18,000	$15,000
Interest Expense				$7,800	$6,000							Accounts Receivable					$86,000	$74,000
Income Tax Expense				$18,000	$14,000							Inventory					$90,000	$70,000
Total expenses				$561,600	$488,600							Total Current Assets					$215,000	$177,000
Net Income				$38,400	$31,400							Plant Assets					$423,000	$383,000
												Total Assets					$638,000	$560,000
Additional Data:
1. The common stock recently sold at $19.50 per share.												Liabilities and Stockholder's Equity
2. Cash dividends in the amount of $15,400 were paid-out in 2013.												Current Liabilities
												Accounts Payable					$122,000	$110,000
												Income Taxes Payable					$23,000	$20,000
												Total Curent Liabilities					$145,000	$130,000
												Long-term Liabilities
												Bonds Payable					$120,000	$80,000
												Total Liabilities					$265,000	$210,000
												Stockholder's Equity
												Common Stock ($5 par value)					$150,000	$150,000
												Retained Earnings					$223,000	$200,000
												Total Stockholder's Equity					$373,000	$350,000
												Total Liabilities and Stockholder's Equity					$638,000	$560,000

					2013 Calculations						2013 Answers
Current ratio
Quick ratio
Receivables turnover
Inventory turnover
Profit margin
Asset turnover
Return on assets
Return on equity
Earnings per share
Price-earnings
Cash Dividend payout
Debt ratio
	Debt-to-Equity
Times interest earned

Answer 1

Ratio analysis as at 31 December 2013 -

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