Question

Markus Company’s common stock sold for $5.25 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this year’s financial statements:     

	Ending Balance		Beginning Balance
Cash	$	49,000	$	44,200
Accounts receivable	$	92,000	$	68,700
Inventory	$	76,300	$	92,000
Current assets	$	217,300	$	204,900
Total assets	$	801,000	$	875,400
Current liabilities	$	85,500	$	90,000
Total liabilities	$	206,000	$	185,400
Common stock, $1 par value	$	165,000	$	165,000
Total stockholders’ equity	$	595,000	$	690,000
Total liabilities and stockholders’ equity	$	801,000	$	875,400

     

	This Year
Sales (all on account)	$	1,095,000
Cost of goods sold	$	635,100
Gross margin	$	459,900
Net operating income	$	313,875
Interest expense	$	15,500
Net income	$	208,862

1. What is the company’s operating cycle?

a.What is the total asset turnover?

b. What is the times interest earned ratio?

c. What is the debt-to-equity ratio at the end of this year?

d. What is the equity multiplier?

Answer 1