Hi, I was having the same issue another person had a while ago. I seen your answ

Question

Hi, I was having the same issue another person had a while ago. I seen your answer but you got to h and it cuts off. I was wondering if you had the rest of the answers???

Thank you

Question below:

Problem 13-5 Basic Financial Ratios

The accounting staff of CCB Enterprises has completed the financial statements for the 2008 calendar year. The statement of income for the current year and the comparative statement of financial position for 2008 and 2007 follow:

CCB Enterprises
Statement of Income
For the Year Ended December 31, 2008
(thousands omitted)

Revenue:
Net sales $800,000
Other 60,000
Total revenue 860,000

Expenses:
Cost of goods sold $540,000
Research and development 25,000
Selling and administrative 155,000
Interest 20,000
Total expenses: $740,000
Income before income taxes 48,000
Net income $ 72,000








CCB Enterprises
Comparative Statements of Financial Position
December 31, 2008 and 2007
(thousands omitted)

2008 2007
Assets
Current assets:
Cash and short term investments $26,000 $21,000
Receivables, less allowance for doubtful accounts 48,000 50,000
($1,100 in 2008 and $1,400 in 2007)
Inventories, at lower of FIFO cost or market 65,000 62,000
Prepaid items and other current assets 5,000 3,000
Total current assets $144,000 $136,000
Other assets:
Investments, at cost $106,000 $106,000
Deposits 10,000 8,000
Total other assets $116,000 $114,000
Property, plant, and equipment:
Land $12,000 $12,000
Buildings and equipment, less accumulated depreciation
($126,000 in 2008 and $122,000 in 2007) 268,000 248,000
Total property, plant, and equipment $280,000 $280,000
Total assets $540,000 $510,000



Liabilities and Owner's Equity
Current liabilities:
Short term loans $22,000 $24,000
Accounts payable 72,000 71,000
Salaries, wages, and other 26,000 27,000
Total current liabilities $120,000 $122,000
Long-term debt 160,000 171,000
Total liabilities $280,000 $293,000
Owner's equity:
Common stock, at par $44,000 $42,000
Paid in capital in exceeds of par $64,000 $61,000
Total paid in capital $108,000 $103,000
Retained earnings $152,000 $114,000
Total owner's equity $260,000 $217,000
Total liabilities and owner's equity $540,000 $510,000

Required
1. Calculate the following financial ratios for 2008 for CCB Enterprises
a. Times interest earned
b. Return on total assets
c. Return on common stockholder's equity
d. Debt-equity ratio (at December 31, 2008)
e. Current ratio (at December 31, 2008)
f. Quick (acid test) ratio (at December 31, 2008)
g. Accounts receivable turnover ratio (Assume that all sales are on credit)
h. Number of days' sales in receivables
i. Inventory turnover ratio (Assume that all purchases are on credit)
j. Number of days' sales in inventory
k. Number of days in cash operating cycle
2. Prepare a few brief comments on the overall financial health of CCB Enterprises. For each comment, indicate an
Information that is not provided in the problem and that you would need to fully evaluate the company's financial health

Explanation / Answer

2008 Tmes interest earned=income before income tax and interest expenses/interest expenses incomebefore income taxes and interest $140,000 interest expenses $20,000 times interest earned=140000/20000 7 times 2.Return on total assetsNet income/Average total assets Net income $72,000 Average total assets=opening total assets+closing total assets/2 Average total assets=$540000+515000/2 $527,500 Return on total assets=72000/527500 13.64% 3.Return on common shareholders equity Netincome/average common stockholders equity Net income $72,000 Average common stock holders equity=260000+217000/2 $238,500 Return on common shareholders equity=72000/238500 30.18% Debt equity ratio= Total debt/Total equity Totaldebt $280,000 Total equity $260,000 Debt equity ratio=$280000/$260000 1.07:1 Current ratio=Current assets/current liabilities Current assets $144,000 Current liabilities $120,000 Current ratio=144000/120000 1.2:1 Quick ratio=Cash+shortterm investments+receivables/current liabilities cash +shorterm investments+receivables $79,000 Current liabilities $120,000 Quick ratio=79000/120000 0.65:1 Accounts receivable turnover ratio=Net credit sales/Average receivables Net sales $800,000 Average receivables=opening receivables+closing receivables/2 Average receivables=48000+50000/2 $49,000 Accounts receivable turnover ratio=8000000/49000 16.32:1 No.of days to sales inventory

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