Required: Determine the following measures for 2014, rounding to one decimal pla
ID: 2474066 • Letter: R
Question
Required: Determine the following measures for 2014, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year 1. Working capital 2. Current ratio 3. Quick ratic 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number. of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Number of times interest charges are. earned 11. Number of times.preferred dividends are earned 12. Ratio of net sales to assets 13. Rate earned on total assets 14. Rate.sarned on.stoskholders.equity 15. Rate earned on common stockholders' equity 16. Earnings per share.on.common steck 17. Price-earnings ratio 18. Dividends.per.share of common stock 19. Dividend yield 5. Mumber of daye' sales in receivables days days Check M (2 remExplanation / Answer
1.Working capital = Current assets - Current liabilities
= 6031542 - 1827740 = 4203802
2.Current ratio = Current assets / Current liabilities
= 6031542 / 1827740 = 3.3 times
3.Quick ratio = Current assets - Prepaid expenses - inventory / Current liabilities
= 6031542 - 281682 - 861400 / 1827740
= 4888460 / 1827740 = 2.67 times
4.Accounts receivable turnover ratio = Credit sales / Average accounts receivable
= 6712900 / 1080400 + 1146100 / 2
= 6712900 / 1113250 = 6.03 times
5.Number of days sales in receivables = 365 / 6.03 = 61 days.
6.Inventory turnover ratio = Cost of goods sold / average inventory
= 2353520 / 657000 + 861400 / 2
= 2353520 / 759200 = 3.1
7.Number of days sales in inventory = 365 / 3. = 118 days
8.Ratio of fixed assets to long term liabilities = Fixed assetsb / long term liabilities
= 1499598 + 6840000 / 5700000
= 1.46
9.Ratio of liabilities to stockholders equity = liabilities / stockholders equity
= 7527740 / 6843400 = 1.1
10.Number of times interest earned = EBIT / interest expense
= 1532400 / 456000
= 3.36
11.Nu,ber of times preferred dividend earned = Net income / preferred dividend
= 947200 / 11900 = 79.6
12.Ratio of net sales to assets = sales / total assets
= 6712900 / 14371140 = 0.47
13.Rate earned on total assets = net income / average total assets
= 947200 / 14371140 + 10464258 / 2
= 947200 / 12417699 = 7.6%
14.Rate earned on stock holders equity = net income / stock holders equity
= 947200 / 6843400 + 5956600 / 2
= 947200 / 6400000 = 14.8%
15.rate earned common stockholders equity = net income / average common stock holders equity
= 947200 / 970000 +970000 / 2
= 947200 / 970000 = 97.65%
16.EPS = Net income - preferred dividend / weighted common shares outstanding
= 947200 - 11900 / 97000 = 9.64
17.Price earnings ratio = MPS /EPS = 69 / 9.64 = 7.16
18.DPS = Dividend / number of shares
= 60400 / 97000 = 0.62
19.Dividend yield = DPS /MPS
= 0.62 / 69 = 0.9%.
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