$49,720 $42,240 $28,340Required:1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers to 2 decimaplaces.)RatioYear 8Year 7Profitability ratios:1. Return on equity2. Return on assets3. Gross profit percentage4 Net profit marginAsset turnover ratios:567Liquidity ratios!8Current ratioSolvency ratios:9. Times-interest-earned ratio10 Debt-to-equity ratioNext >Fixed asset turnoverReceivables turnoverInventory turnover%%%%%%%%Prev2 of 12 Consolidated Statements of EarningsFor the Years Ended December 31,(in thousands of dollars)Year 8Sales$64,000Cost of sales.50,000Gross profit14,000Operating expenses before interest and income taxes8,000Interest expense1,780Earnings before income taxes4,220Income tax expense1,900Net earnings$ 2,320MORKSEN CORP.Consolidated Statements of Financial PositionAt December 31,(in thousands of dollars)Year 8Year 7AssetsCurrent assetsCash$ 480$ 38074010,880Short-term investmentsAccounts receivable7408,400Merchandise inventory16,66010,060Total current assets28,660 19,680Property, plant, and equipmentLand4,0004,000Buildings and equipment26,00026,00030,00030,0008,9407,440Less: Accumulated depreciation.Net property, plant, and equipment21,06022,560Total assets$49,720$42, 240Liabilities and Shareholders' EquityCurrent LiabilitiesBank loan$16,500$11,400Accounts payable6,0004,300Other liabilities1,6401,600Income tax payable9601,040Total current liabilities25,10018,340Shareholders' equitymmon shares20,00020,000Retained earnings4,1403,520Other comprehensive income38048024,620Total shareholders' equity23,900Total liabilities and shareholders' equity$49,720$42,240< PrevYear 7Year 6$56,000$46,80043,00036,00013,00010,8007,4006,6201,2204,3804,1802,0401,940$ 2,340 $ 2,240Year 6$1,0007405,1407,22014,1002,00018,00020,0005,76014,240$28,340$2,8801,5001,0005,38020,0002,64032022,960$28,3402 of 12Ne

calculation of above requirement are as follows

1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers places.) Ratio Year 8 Year 7 Profitability ratios: 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin Asset turnover ratios: 5 Fixed asset turnover Receivables turnover 6 7 Inventory turnover Liquidity ratios 8 Current ratio % % % % % % % %

1. Compute the following ratios for the past two years. (Do not round intermediate calculations. Round the final answers places.) Ratio Year 8 Year 7 Profitability ratios: 1. Return on equity 2. Return on assets 3. Gross profit percentage 4. Net profit margin Asset turnover ratios: 5 Fixed asset turnover Receivables turnover 6 7 Inventory turnover Liquidity ratios 8 Current ratio % % % % % % % %

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.18MCE

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