BBA 3301 Unit II Assignment

4–25. (Calculating financial ratios) The balance sheet and income statement for the J. P. Robard Manufacturing Company are as follows: J. P. Robard Manufacturing Company Balance Sheet ($ thousands)

   Cash

$   500

  Accounts receivable

2,000

  Inventory

  1,000

Total current assets

3,500

  Net fixed assets

  4,500

Total assets

$8,000

  Accounts payable

$1,100

  Accrued expenses

600

  Short-term notes payable

    300

Total current liabilities

$2,000

   Long-term debt

2,000

Total common stockholders’ equity

4,000

Total liabilities and stockholders’ equity

$8,000

J. P. Robard Manufacturing Company Income Statement ($ thousands)

Net sales (all credit)

$8,000

  Cost of goods sold

(3,300)

Gross profit

$4,700

  Operating expenses (includes $500 depreciation)

(3,000)

Net operating income

$1,700

  Interest expense

   (367)

Earnings before taxes

$1,333

  Income taxes (40%)

   (533)

Net income

$   800

Calculate the following ratios: Current ratio

Operating return on assets

Times interest earned

Debt ratio

Inventory turnover

Average collection period

Total asset turnover

Fixed asset turnover

Operating profit margin

Return on equity