Assignment> Open Assignment Problem 11-7A Your answer is partially correct. Try

Question

Assignment> Open Assignment Problem 11-7A Your answer is partially correct. Try again. Mangold Company manufactures backpacks. During 2017, Mangold issued bonds at 12% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Marigold Company for the years 2017 and 2016 2017 2016 Sales revenue Net income Interest expense Tax expense Dividends paid on common stock Dividends paid on preferred stock Total assets (vear-end) 12,500,000 $12,600,000 3,136,000O 3.s00,000 900.000252,000 938,000,050,000 1,602,000.846,800 40,000$40,000 20,300,00023.625,000 Average total assets Total labieties (yeaend 8,237,500111131,973.400 10.00,00040.000 Avg. total common stocknolds equity wl6.920,00025 380,000 use the information above to calculate the foilowing ratios for both years: (Round answers ee 1 decimal place, e 12.5% or 12.5.) 3 4 5 9

Explanation / Answer

Calculations of ratios

2016= 540000/$31973400=

ROCSHE= 4806800/25380000= 18.93 OR 0.1893

2017

ROCSHE= net incom'/assets= $2756200/169920000= 16.28 or 0.1628

2016

2)Return on assets = NI/assets =3500000/ 25380000=13.79 or 0.1379

2017

Return on assets = 3136000/16920000=18.53 or 0.1853

2017

3)Debt to asset ratio =

For2017= 10800000/28237500

= 0.38

For 2016. =5400000/31973400=0.1688

4)time interest earned = EBIT / EBT

FOR 2017 = 3136000/900000=3.484

FOR 2016= 3500000/252000= 13.88

notes net calculations for return on share holder equity

NI = net income +dividends paid to equity share holders - dividends paid on preference share holders

  

  

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.