Ratios

Question 1 Table 1

Income Statement Balance Sheet

Sales $20,000,000 Assets:

Cost of Goods Sold 8,000,000 Cash $ 5,000,000

12,000,000 Marketable Securities 12,500,000

Selling and Administrative 1,600,000 Accounts Receivable, net 2,500,000

Depreciation 3,000,000 Inventory 30,000,000

7,400,000 Prepaid Expenses 5,000,000

Interest 2.000,000 Plant & Equipment 30,000,000

5,400,000

Taxes (40%) 2,160,000 Total Assets 85,000,000

3,240,000

Common Stock Div. 600,000 Liabilities and Equity:

$2,640,000 Accounts Payable $20,000,000

Notes Payable 5,000,000

Accrued Expenses 5,000,000

Bonds 25,000,000

Common Stock 5,000,000

Capital in Excess of Par 10,000,000

Retained Earnings 15,000,000

Total Liabilities and

Equity $85,000,000

Shares outstanding of common stock = 1,000,000

Market price of common stock = $18.

Use Table 1 for the following 15 questions.

1-7. The Total Debt to Total Asset ratio is:

1-8. Return on Assets ratio is:

1-9. The Total Asset Turnover ratio is:

1-10. The Operating Profit Margin is:

1-11. The Average Collection Period (365 day year) is:

1-12. The Market to Book ratio is:

1-13. The Debt to Equity ratio is:

1-14. The Inventory Turnover ratio is:

1-15. The Return on Equity is: