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KERSENBROCK CORPORATION Balance Sheets December 31 2011 2010 2009 $ 25,000 50,000 90,000 $ 20,000 45,000 95,000 70,000 370,000 $ 18,000 48,000 64,000 45,000 Cash Receivables (net) Other current assets Investments 75,000 Plant and equipment (net) 400,000 358,000 $533,000 $640,000 $ 75,000 80,000 340,000 145,000 $640,000 $600,000 $ 80,000 85,000 Current liabilities $ 70,000 Long-term debt Common stock, $10 par Retained earnings 50,000 310,000 125,000 $600,000 300,000 113,000 $533,000 KERSENBROCK CORPORATION Income Statement For the Year Ended December 31 2011 $740,000 40,000 2010 $700,000 50,000 650,000 Sales Less: Sales returns and allowances Net sales 700,000 420,000 Cost of goods sold 400,000 250,000 220,000 S 30,000 280,000 Gross profit Operating expenses (including income taxes) 235,000 $ 45,000 Net income Additional information: 1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2009, 2010, and 2011, respectively. 2. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2010 and 2011. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2011 were 32,000 and in 2010 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.

KERSENBROCK CORPORATION Balance Sheets December 31 2011 2010 2009 $ 25,000 50,000 90,000 $ 20,000 45,000 95,000 70,000 370,000 $ 18,000 48,000 64,000 45,000 Cash Receivables (net) Other current assets Investments 75,000 Plant and equipment (net) 400,000 358,000 $533,000 $640,000 $ 75,000 80,000 340,000 145,000 $640,000 $600,000 $ 80,000 85,000 Current liabilities $ 70,000 Long-term debt Common stock, $10 par Retained earnings 50,000 310,000 125,000 $600,000 300,000 113,000 $533,000 KERSENBROCK CORPORATION Income Statement For the Year Ended December 31 2011 $740,000 40,000 2010 $700,000 50,000 650,000 Sales Less: Sales returns and allowances Net sales 700,000 420,000 Cost of goods sold 400,000 250,000 220,000 S 30,000 280,000 Gross profit Operating expenses (including income taxes) 235,000 $ 45,000 Net income Additional information: 1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2009, 2010, and 2011, respectively. 2. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2010 and 2011. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2011 were 32,000 and in 2010 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.13P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
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Compute the following sub parts ratios for 2010 and 2011.

4) Price earnings 

5) Payout 

6) Debt to total assets 

KERSENBROCK CORPORATION Balance Sheets December 31 2011 2010 2009 $ 25,000 $ 20,000 $ 18,000 Cash Receivables (net) Other current assets 50,000 45,000 48,000 90,000 95,000 64,000 Investments 75,000 70,000 45,000 Plant and equipment (net) 400,000 370,000 358,000 $640,000 $600,000 $ 80,000 85,000 $533,000 $ 75,000 $ 70,000 50,000 300,000 Current liabilities Long-term debt Common stock, $10 par Retained earnings 80,000 340,000 310,000 145,000 125,000 113,000 $640,000 $600,000 $533,000 KERSENBROCK CORPORATION Income Statement For the Year Ended December 31 2011 2010 Sales $740,000 $700,000 Less: Sales returns and allowances 40,000 50,000 Net sales 700,000 420,000 650,000 Cost of goods sold 400,000 250,000 Gross profit Operating expenses (including income taxes) 280,000 235,000 220,000 $ 45,000 $ 30,000 Net income Additional information: 1. The market price of Kersenbrock's common stock was $4.00 $5.00, and $8.00 for 2009, 2010, and 2011, respectively. 2. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2010 and 2011. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2011 were 32,000 and in 2010 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
Transcribed Image Text:KERSENBROCK CORPORATION Balance Sheets December 31 2011 2010 2009 $ 25,000 $ 20,000 $ 18,000 Cash Receivables (net) Other current assets 50,000 45,000 48,000 90,000 95,000 64,000 Investments 75,000 70,000 45,000 Plant and equipment (net) 400,000 370,000 358,000 $640,000 $600,000 $ 80,000 85,000 $533,000 $ 75,000 $ 70,000 50,000 300,000 Current liabilities Long-term debt Common stock, $10 par Retained earnings 80,000 340,000 310,000 145,000 125,000 113,000 $640,000 $600,000 $533,000 KERSENBROCK CORPORATION Income Statement For the Year Ended December 31 2011 2010 Sales $740,000 $700,000 Less: Sales returns and allowances 40,000 50,000 Net sales 700,000 420,000 650,000 Cost of goods sold 400,000 250,000 Gross profit Operating expenses (including income taxes) 280,000 235,000 220,000 $ 45,000 $ 30,000 Net income Additional information: 1. The market price of Kersenbrock's common stock was $4.00 $5.00, and $8.00 for 2009, 2010, and 2011, respectively. 2. All dividends were paid in cash. Instructions (a) Compute the following ratios for 2010 and 2011. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2011 were 32,000 and in 2010 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
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