Exercise 16-8 (Algo) Selected Financial Ratios [LO16-2, LO16-3, LO16-4]The financial statements for Castile Products, Incorporated, are given below:Castile Products, IncorporatedBalance SheetDecember 31AssetsCurrent assets:$ 22,000160,000380,000CashAccounts receivable, netMerchandise inventory11,000573,000Prepaid expensesTotal current assetsProperty and equipment, net820,000Total assets$ 1,393,000Liabilities and Stockholders' EquityLiabilities:$ 260,000370,000630,000Current liabilitiesBonds payable, 11%Total liabilitiesStockholders' equity:Common stock, $10 par valueRetained earningsTotal stockholders' equity$ 110,000653,000763,000Total liabilities and stockholders' equity$ 1,393,000Castile Products, IncorporatedIncome StatementFor the Year Ended December 31$ 3,300,0001,137,5002,162,500630,0001,532,50040,700SalesCost of goods soldGross marginSelling and administrative expensesNet operating incomeInterest expense1,491,800447,540Net income before taxesIncome taxes (30%)Net income$ 1,044,260 Account balances at the beginning of the year were: accounts receivable, $170,000; and inventory, $270,000. All sales were onaccount.Required:Compute the following financial data and ratios:1. Working capital.2. Current ratio. (Round your answer to 1 decimal place.)3. Acid-test ratio. (Round your answer to 2 decimal places.)4. Debt-to-equity ratio. (Round your answer to 2 decimal places.)5. Times interest earned ratio. (Round your answer to 2 decimal places.)6. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimalplace.)7. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)8. Operating cycle. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.)1. Working capital2. Current ratio3. Acid-test ratio4. Debt-to-equity ratio5. Times interest earned ratio6. Average collection perioddays7. Average sale perioddays8. Operating cycledays

The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: $ 22,000 160,000 380,000 11,000 573,000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net 820,000 $ 1,393,000 Total assets Liabilities and Stockholders' Equity Liabilities: $ 260,000 370,000 630,000 Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity $ 110,000 653,000 763,000 Total liabilities and stockholders' equity $ 1,393,000 Castile Products, Incorporated Income Statement For the Year Ended December 31 $ 3,300,000 1,137,500 2,162,500 630,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense 1,532,500 40,700 1,491,800 447,540 $ 1,044,260 Net income before taxes Income taxes (30%) Net income

The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: $ 22,000 160,000 380,000 11,000 573,000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net 820,000 $ 1,393,000 Total assets Liabilities and Stockholders' Equity Liabilities: $ 260,000 370,000 630,000 Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity $ 110,000 653,000 763,000 Total liabilities and stockholders' equity $ 1,393,000 Castile Products, Incorporated Income Statement For the Year Ended December 31 $ 3,300,000 1,137,500 2,162,500 630,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense 1,532,500 40,700 1,491,800 447,540 $ 1,044,260 Net income before taxes Income taxes (30%) Net income

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 9.17E: Profitability metrics The following selected data were taken from the financial statements of The...

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