Question

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergan Corporation Balance Sheets December 31
		2020			2019			2018
Cash		$ 30,600			$ 17,300			$ 17,300
Accounts receivable (net)		50,900			44,500			48,600
Other current assets		90,100			94,800			64,900
Investments		54,700			70,600			44,600
Plant and equipment (net)		500,600			370,000			358,700
		$726,900			$597,200			$534,100
Current liabilities		$85,600			$79,000			$70,700
Long-term debt		144,200			85,000			50,900
Common stock, $10 par		384,000			319,000			308,000
Retained earnings		113,100			114,200			104,500
		$726,900			$597,200			$534,100

Jergan Corporation Income Statement For the Years Ended December 31
		2020			2019
Sales revenue		$736,500			$605,600
Less: Sales returns and allowances		40,200			31,000
Net sales		696,300			574,600
Cost of goods sold		424,600			372,000
Gross profit		271,700			202,600
Operating expenses (including income taxes)		181,181			150,886
Net income		$ 90,519			$ 51,714

Additional information:

1.		The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively.
2.		You must compute dividends paid. All dividends were paid in cash.

(a)

Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)

				2019			2020
(1)		Profit margin			%			%
(2)		Gross profit rate			%			%
(3)		Asset turnover			times			times
(4)		Earnings per share		$			$
(5)		Price-earnings ratio			times			times
(6)		Payout ratio			%			%
(7)		Debt to assets ratio			%			%

Answer 1

Gross Margin Ratio- jergan Cprporation
	2020	2019
Gross Profit (a)	$271,700	$202,600
Net Sales (b)	$696,300	$574,600
Profit Margin (axb)	39.02%	35.26%
Profit Margin Ratio
	2020	2019
Net Income (a)	$90,519	$51,714
Net Sales (b)	$696,300	$574,600
Profit Margin (axb)	13.00%	9.00%
Asset Tuover Ratio
	2020	2019
Net Sales (a)	$696,300	$574,600
average Assets (b)	662050	565650
	(726900+597200)/2	(597200+534100)/2
Asset Turnover Ratio (a/b)	1.05	1.02
Debt Equity Ratio
	2020	2019
Debt (a)	$229,800	$164,000
Equity (b)	497100	433200
Debt Equity Ratio (a/b)	0.46	0.38
Earning per share
	2020	2019
Net Income (a)	$90,519	$51,714
Weighted Average Share (b)	35150	31350
	(38400+31900)/2	(31900+30800)/2
EPS (a/b)	2.58	1.65
Price Earnign Ratio
	2020	2019
Price	$8.50	$7.50
EPS	2.58	1.65
P/E Ratio (a/b)	3.30	4.55
Payout ratio
	2020	2019
Dividend	$91,619.00	$42,014.00
Net Income	$90,519	$51,714
Dividend Payour ratio	101%	81%

Diviend for 2020=(114200+90519)-113100

Diviend for 2019=(104500+51714)-114200