Given below is AU Chiefs Company's financial statements. Compute for the financial rations and show the solutions in a sheet of paper. 1. Expenses to sale ratio 2. Return on assets 3. Return on Equity 4. Asset Turnover ratio 2020 2019 Cash 122,500 104,700 Accounts Receivable 90,650 80,550 66,200 53,000 Inventory Prepaid Expense Total Current Assets 85,450 106,000 344,250 786,350 1,475,350 364,800 Property, Plant and Equipment 925,000 TOTAL ASSETS 1,654,600 Total Current Liability Long-term Liabilities Mabini, Capital Total Liability and Equity 381,500 359,900 913,200 1,654,600 423,350 230,600 821,400 1,475,350 Sales 1,047,050 1,151,755 Cost of Sales 322,750 355,025 Gross Profit 724,300 796,730 Selling Expenses Administrative Expenses Operating Income Interest Income Net Income 388,575 140,965 267,190 11,550 255,640 353,250 128,150 242,900 10,500 232,400 Interpret the results of your computation for the following rations: 1. Expenses to ratio - 2. Return on assets -
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- Nineteen measures of solvency and profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was 119.70 on December 31, 2016. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings, January 1................ 5,375,000 4,545,000 Add net income for year......................... 900,000 925,000 Total..................................... 6,275,000 5,470,000 Deduct dividends: On preferred stock............................................. 45,000 45,000 On common stock.............................................. 50,000 50,000 Total........................................................ 95,0000 95,000 Retained earnings, December 3................................... 6,180,000 5,375,000 Stargel Inc. Comparative Income Statement For the Year Ended December 31, 2016 and 2015 2016 2015 Sales..................... 10,000,000 9,400,000 Cost of goods sold......... 5,350,000 4,950,000 Gross profit............... 4,650,000 4,450,000 Selling expenses.......... 2,000,000 1,080,000 Administrative expenses... 1,500.000 1,410,000 Total operating expenses 3,500,000 3,290,000 Income from operations ... 1,150,000 1,160,000 Other income............. 150,000 140,000 1,300,000 1,300,000 Other expense (interest). 170,000 150,000 Income before income tax 1,130,000 1,150,000 Income tax expense....... 230,000 225,000 Net income............... 900,000 925,000 Stargel Inc. Comparative Income Statement For the Year Ended December 31, 2016 and 2015 Dec.31, 2016 Dec. 31, 2015 Assets Current Assets: Cash.................................... 500,000 400,000 Marketable securities.................... 1,010,000 1,000,000 Accounts receivable (net)................. 740,000 510,000 Inventories.............................. 1,190000 950,000 Prepaid expenses........................ 250,000 229,000 Total current assets..................... 3,690,000 3,089,000 Long-term investments.................... 2,350,000 2,300,000 Property, plant and equipment (net)....... 3,740,000 3,366,000 Total assets............................... 9,780,000 8,755,000 Liabilities Current liabilities.......................... 900,000 880,000 Long-term liabilities: Mortgage note payable, 8.8%, due 2021... 200,000 0 Bonds payable, 9%, due 2017............. 1,500,000 1,500,000 Total long term liabilities............... 1,700,000 1,500,000 Total liabilities............................ 2,600,000 2,380,000 Stockholders' equity Preferred stock 0.90, 10 par.. 500,000 500,000 Common stock. 5 par..................... 500,000 500,000 Retained earnings......................... 6,180,000 5,375,000 Total stockholders' equity............... 7,180,000 6,375,000 Total liabilities and stockholders' equity..... 9,780,000 8,755,000 Instructions Determine the following measures for 2016, rounding to one decimal place, except per share amounts, which should be rounded to the nearest penny: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days salts in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to .stockholders' equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yieldNineteen measures of solvency and profitability The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was 71.25 on December 31, 2016. Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings. January 1......................................... 2,655,000 2,400,000 Add net income for year............................................. 300,000 280,000 Total............................................................... 2,955,000 2,680,000 Deduct dividends: On preferred stock................................................ 15,000 15,000 On common stock................................................. 10,000 10,000 Total........................................................... 25,000 25,000 Retained earnings. December 31..................................... 2,930,000 2,655,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Sales...................... 1,200,000 1,000,000 Cost of goods sold............ 500,000 475,000 Gross profit............... 700,000 525,000 Selling expenses.......... 240,000 200,000 Administrative expenses...... 180,000 150,000 Total operating expenses.. 420,000 350,000 Income from operations.. 280,000 175,000 Other income............. 166,000 225,000 446,000 400,000 Other expense (Interest)... 66,000 60,000 Income before income tax 380,000 340,000 Income tax expense....... 80,000 60,000 Net income............... 300,000 280,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 Dec.31, 2016 Dec. 31, 2015 Assets Current Assets: Cash.................................... 450,000 400,000 Marketable securities.................... 300,000 260,000 Accounts receivable (net)................. 130,000 110,000 Inventories.............................. 67,000 58,000 Prepaid expenses........................ 153,000 139,000 Total current assets..................... 1,100,000 967,000 Long-term investments.................... 2,350,000 2,200,000 Property, plant and equipment (net)....... 1,320,000 1,118,000 Total assets............................... 4,770,000 4,355,000 Liabilities Current liabilities.......................... 440,000 400,000 Long-term liabilities: Mortgage note payable, 8.8%, due 2021... 100,000 0 Bonds payable, 9%, due 2017............. 1,000,000 1,000,000 Total long term liabilities............... 1,100,000 1,000,000 Total liabilities............................ 1,540,000 1,400,000 Stockholders' equity Preferred stock 0.90, 10 par.. 200,000 200,000 Common stock. 5 par..................... 100,000 100,000 Retained earnings......................... 2,930,000 2,665,000 Total stockholders equity............... 3,230,000 2,955,000 Total liabilities and stockholders' equity..... 4,770,000 4,355,000 Instructions Determine the following measures for 2016, rounding to one decimal place: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yieldMeasures of liquidity, solvency and profitability The comparative financial statements of Stargel Inc. are as follows. The market price of common stock was 119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1............. 5,375,000 4,545,000 Net income............................. 900,000 925.000 Total................................ 6,275,000 5,470,000 Dividends: Preferred stock dividends............. 45,000 45,000 Common stock dividends............. 50,000 50,000 Total dividends.................... 95,000 95,000 Retained earnings, December 31......... 6,180,000 5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales..................... 10,000,000 9,400,000 Cost of goods sold......... 5,350,000 4,950,000 Gross profit............... 4,650,000 4,450,000 Selling expenses.......... 2,000,000 1,880,000 Administrative expenses....... 1,500,000 1,410,000 Total operating expenses 3,500,000 3,290,000 Income from operations. 1,150.000 1,160,000 Other revenue............ 150,000 140,000 1,300,000 1,300,000 Other expense (interest).. 170,000 150,000 Income before income tax.. 1,130,000 1,150,000 Income tax expense....... 230,000 225,000 Net income............... 900,000 925,000 Stargel Inc. Comparative Balance Sheet December 31,20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash.......................................................... 500,000 400,000 Marketable securities........................................... 1,010,000 1,000,000 Accounts receivable (net)....................................... 740,000 510,000 Inventories.................................................... 1,190,000 950,000 Prepaid expenses.............................................. 250,000 229,000 Total current assets.......................................... 3,690,000 3,089,000 Long term investments............................................ 2,350,000 2,300,000 Property, plant, and equipment (net)............................... 3,740,000 3,366,000 Total assets....................................................... 9,780.000 8,755,000 Liabilities Current liabilities.................................................. 900,000 880,000 Long term liabilities: Mortgage note payable, 10%.................................... 200,000 0 Bonds payable, 10%............................................ 1,500,000 1,500,000 Total long term liabilities.................................... 1,700,000 1,500,000 Total liabilities.................................................... 2,600,000 2,380,000 Stockholders' Equity Preferred 0, 90 stock. 10 par...................................... 500,000 500,000 Common stock, 5 par............................................. 500,000 500,000 Retained earnings................................................. 6,180,000 5,375,000 Total stockholders' equity.......................................... 7,180,000 6,375,000 Total liabilities and stockholders' equity............................. 9,780,000 8,755,000 Instructions Determine the following measures for 20Y2, rounding to one decimal place including percentages, except for per-share amounts: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity- 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yield
- Profitability ratios The following selected data were taken from the financial statements of Robinson Inc. for December 31, 2016, 2015 and 2014: December31 2016 2015 2014 Total assets......................................... 4,800,000 4,400,000 4,000,000 Notes payable (8% interest)........................... 2,250,000 2,250,000 2,250,000 Common stock...................................... 250,000 250,000 250,000 Preferred 4% stock, 100 par (no change during year)........................... 500,000 500,000 500,000 Retained earnings................................... 1,574,000 1,222,000 750,000 The 2016 net income was 372,000, and the 2015 net income was 492,000. No dividends on common stock were declared between 2014 and 2016. a. Determine the rate earned on total assets, the rate earned on stockholders equity, and the rate earned on common Stockholders equity for the years 2015 and 2016. Round to one decimal place. b. What conclusions can be drawn from these data as to the companys profitability?Changes in current operating assets and liabilities-indirect method Alpenrose Corporations comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 2016 Dec. 31, 2015 Accounts receivable 27,000 32,400 Inventory 18,000 15,480 Accounts payable 16,200 14,220 Dividends payable 49,500 53,100 Adjust net income of 207,000 for changes in operating assets and liabilities to arrive at net cash flow from operating activities.