Chapter 11, Problem 11.17C

To determine

(a)

To complete the following income statement and balance sheet of Whittaker, INC.

To determine

(b)

To find: The ratios again with the data acquired in the first part

• $Currentratio=$

  $\frac{\text{Current Asset}}{\text{Current liabilities}}$

= $\frac{342000}{180000}$

= 1.9 to 1

• $AcidTestratio=$

  $\frac{CurrentAssest-Inventories}{Currentliabilities}$

= $\frac{342000-108000}{180000}$

= 1.3 to 1

• $Debt-equityratio=\frac{Debt}{Equity}$

= $\frac{140000}{70000}$

= 2 to 1

• $AverageInventory=\frac{Openinginventory+closinginventory}{2}$

  $=\frac{408000}{102000}$

= 4 times

• $AccountReceivableratio=\frac{Netcreditsales}{AverageaccountReceivable}$

  $=\frac{680000}{100000}$

= 6.8 times

• $Timesinterestearned=\frac{EBIT}{Interestexpense}$

= $\frac{89000}{20000}$

=4.45 Times

• $\text{Grossprofitratio=}\frac{\text{G}\text{.P}\text{.}}{\text{Netsales}}\text{×100}$

    $=\frac{272000}{680000}\times 100$

• $\begin{array}{l}Earningpershare=\frac{Netincome}{No.ofcommonsharesout\text{standing}}\\ \end{array}$

= $\frac{55200}{10000}$

= $5.25