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In: Finance
VITALSTATISTIX, INC. 2017 Balance Sheet Items Assets Liabilities and Owners’ Equity Cash $200 Accounts Payable $200 ...
VITALSTATISTIX, INC.
2017 Balance Sheet Items
Assets Liabilities and Owners’ Equity
Cash $200 Accounts Payable $200
Accounts Receivable 400 Notes Payable 100
Inventory 650 Long-Term Debt 1,050
Net Plant and Equipment 2,400 Common Stock 500
Paid-in Surplus 1,500
Retained Earnings 300
VITALSTATISTIX, INC.
2017 Income Statement
Sales $2,700
Cost of Goods Sold 800
Depreciation 100
Earnings Before Interest and Taxes $1,800
Interest Paid 150
Taxable Income $1,650
Taxes 550
Net Income $1,100
13. Vitalstatistix, Inc. has 500 shares of common stock outstanding, and the stock
price at the end of the year was $17.50. Calculate its Market-to-Book Ratio.
(2 points)
14. Calculate the following financial ratios for Vitalstatistix, Inc.
a) Current Ratio (2 points)
b) Total Debt Ratio (3 points)
Total Debt Ratio = (Total Assets – Total Equity) / Total Assets
c) Return on Equity (2 points)
Solutions
Expert Solution
(13)-Market-to-book ratio
Book value per share = Total Stockholders Equity / Number of shares outstanding
= [Common stock + Paid in surplus + Retained earnings] / Number of shares outstanding
= [$500 + $1,500 + $300] / 500 shares outstanding
= $2,300 / 500 shares outstanding
= $4.60 per share
Therefore, the Market-to-book ratio = Market Price per share / Book value per share
= $17.50 per share / $4.60 per share
= 3.80 Times
(14)(a)-Current Ratio
Current Ratio = Total current assets / Total current liabilities
= [cash + Accounts receivables + Inventory] / [Accounts payable + Notes payable]
= [$200 + $400 + $650] / [$200 + $100]
= $1,250 / $300
= 4.17
(14)(b)-Total Debt Ratio
Total Debt Ratio = (Total Assets – Total Equity) / Total Assets
= [$3,650 - $2,300] / $3,650
= $1,350 / $3,650
= 0.37
(14)(c)-Return on Equity
Return on Equity = [Net Income / Total Equity] x 100
= [$1,100 / $2,300] x 100
= 47.83%
jeff jeffy answered 4 months agoRelated Solutions
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Accounts receivable ............ 25
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Inventory .............................. 28
Accrued taxes .................. 13
Current assets ................... $80
Current liabilities .......... $40
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Notes Payable 200
Accounts Receivable 400
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Accounts payable
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Short-term investments
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Accrued wages payable
3,800
Accounts receivable, net
32,800
Income taxes payable
3,900
Merchandise inventory
38,150
Long-term note payable, secured by mortgage on plant
assets
70,400
Prepaid expenses
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Retained earnings
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Marketable
Securities
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Accounts
Receivable
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Inventory
33,000
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Fixed Assets
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Payable
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Notes
Payable
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ACCOUNTS PAYABLE
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CASH EQUIVALENTS
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1,549
ACCOUNTS RECEIVABLE
1,827
DEFFERED TAX LIABILITY
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LONG-TERM DEBT
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8,728
PREFFERED STOCK
432
COMMON EQUITY
1,112
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OPERATING EXPENSES
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INTEREST EXPENSE
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INCOME BEFORE TAX
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NET INCOME
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