Financial mix ratios. The data given below were obtained from the financialrecords of Menace V. Corporation for the year ended December 31, 2012.Menace V. CorporationStatement of Financial PositionDecember 31, 2012(000s omitted)ASSETSCashP 85,000Marketable Securities, net25,000Trade receivables, net245,000Inventory, at cost220,000Prepaid expenses10,000Equipment, net320,000Other assets15,000Total AssetsP 920,000EQUITIESTrade payablesP 165,000Accrued Expenses25,000Other current liabilities10,000Mortgage payable120,000 Share Capital, 100 par300,000Share Premium30,000Retained earnings – appropriated80,000Retained earnings – unappropriated190,000Total equitiesP 920,000 Menace V. CorporationIncome StatementYear Ended December 31, 2012(000s omitted)Net salesP 1,000,000Cost of goods sold:Inventory, December 31, 2011P 250,000Purchases720,000Inventory, December 31, 2012(220,000)750,000Gross profit250,000Selling, administrative and otherexpenses125,000Income before taxes125,000Provision for income taxes35,000Net income for the year90,000Retained earnings, beginning130,000Total220,000Dividends paid30,000Retained earnings, endP 190,000Required:1. Net working capital.2. Current ratio.3. Acid-test ratio.4. Accounts receivable turnover and average collection period.5. Inventory turnover and average days to sell inventory.6. Gross profit rate on sales.7. Book value per ordinary share.8. Rate of return on sales.9. Earnings per share.10.Rate of return on invested capital.11.Debt-to-equity ratio.12.Debt ratio.

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Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 17E

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Financial mix ratios. The data given below were obtained from the financial
records of Menace V. Corporation for the year ended December 31, 2012.

Menace V. Corporation
Statement of Financial Position
December 31, 2012
(000s omitted)
ASSETS
Cash	P 85,000
Marketable Securities, net	25,000
Trade receivables, net	245,000
Inventory, at cost	220,000
Prepaid expenses	10,000
Equipment, net	320,000
Other assets	15,000
Total Assets	P 920,000
EQUITIES
Trade payables	P 165,000
Accrued Expenses	25,000
Other current liabilities	10,000
Mortgage payable	120,000

Share Capital, 100 par	300,000
Share Premium	30,000
Retained earnings – appropriated	80,000
Retained earnings – unappropriated	190,000
Total equities	P 920,000

Menace V. Corporation
Income Statement
Year Ended December 31, 2012
(000s omitted)
Net sales	P 1,000,000
Cost of goods sold:
Inventory, December 31, 2011	P 250,000
Purchases	720,000
Inventory, December 31, 2012	(220,000) 750,000
Gross profit	250,000
Selling, administrative and other expenses	125,000
Income before taxes	125,000
Provision for income taxes	35,000
Net income for the year	90,000
Retained earnings, beginning	130,000
Total	220,000
Dividends paid	30,000
Retained earnings, end	P 190,000

Required:
1. Net working capital.
2. Current ratio.
3. Acid-test ratio.
4. Accounts receivable turnover and average collection period.
5. Inventory turnover and average days to sell inventory.
6. Gross profit rate on sales.
7. Book value per ordinary share.
8. Rate of return on sales.
9. Earnings per share.
10.Rate of return on invested capital.
11.Debt-to-equity ratio.
12.Debt ratio.

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