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Wiemers Corporation’s comparative balance sheets are presented below. WIEMERS CORPORATION Balance Sheets December 31 2017 2016...

Wiemers Corporation’s comparative balance sheets are presented below. WIEMERS CORPORATION Balance Sheets December 31 2017 2016 Cash $ 4,200 $ 3,200 Accounts receivable (net) 21,000 23,200 Inventory 10,000 6,600 Land 19,700 26,100 Buildings 69,700 69,700 Accumulated depreciation—buildings (14,700 ) (10,300 ) Total $109,900 $118,500 Accounts payable $ 12,400 $ 31,600 Common stock 76,000 71,000 Retained earnings 21,500 15,900 Total $109,900 $118,500 Wiemers’s 2017 income statement included net sales of $111,000, cost of goods sold of $60,400, and net income of $14,500. Compute the following ratios for 2017. (Round answers to 2 decimal places, e.g. 1.65, or 1.65% .) Current ratio :1 Acid-test ratio :1 Accounts receivable turnover times Inventory turnover times Profit margin % Asset turnover times Return on assets % Return on common stockholders’ equity % Debt to assets ratio %

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Expert Solution

Current ratio = Current Assets / Current liabilities

                           = 35,200 / 12,400

                           = 2.83

Acid test ratio = current assets - inventory / current liabilities

                             = 25,200 / 12,400

                             = 2.03

Account Receivable turnover = net credit sale / average receivable

                                                            = 111,000 / 22,100

                                                            = 5.02 times

Average receivable = receivable at beginning + receivable at ending / 2

                                         = 23,200 + 21,000 / 2

                                         = 22,100

Inventory turnover = Cost of goods sold / average inventory

                                        = 60,400 / 8,300

                                        = 7.27 times

Average inventory = inventory at beginning + inventory at ending / 2

                                       = 6,600 + 10,000 / 2

                                       = 8,300

profit margin = net profit / sale x 100

                            = 14,500 / 111,000 x 100

                            = 13.06%

Assets turnover ratio = net sales / average total assets

                                            = 111,000 / 114,200

                                            = 0.97 times

Average total assets = assets of previous year + assets of current year / 2

                                          = 118,500 + 109,900 / 2

                                          = 114,200

Return on Assets = net income / average total assets

                                    = 14,500 / 114,200

                                    0.1269 X 100 = 12.69%

Return on common stockholder's equity = net income / average stockholder's equity

                                                                                   = 14,500 / 92,200

                                                                                   = 0.1572 x 100 = 15.72%

Debt to assets = total Liabilities / total Assets

                              = 12,400 / 109,900

                              = 0.1128 x 100 = 11.28%

ekkarill92 answered 1 year ago
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