1) working capital 2)current ratio 4)accounts receivable turnover 5)Number of da
ID: 2546595 • Letter: 1
Question
1) working capital 2)current ratio 4)accounts receivable turnover 5)Number of days sales 6) inventory turnover 7)Numbers of days sales in inventory 8) ratio of fixed assets long term liabilities 9) ratio of liabilities 12)ratio of net sales to assets 13) Rate earned on ttotal assts 14)rate earned on stockholders equity 15) rate earned on common stocholders esuity 16) earnings per share on common stock 17) price earnings ratio 18) dividnds per share of common stocka. Sold temporary invest b. Paid accounts payable, $10,000. c. Purchased goods on account, $75,000. d. Paid notes payable, $30,000. e. Declared a cash dividend, $15,000. f Declared a stock dividend on common stock, $24,000. &. Borrowed cash from bank on a long-term note, $150,000. h. Received cash on account, $72,000. i. Issued additional shares of stock for cash, $300,000. i. Paid cash for prepaid expenses, $10,000. P9.4 Nineteen measures of liquidity, solvency, and profitability The comparative financial statements of Tec Solutions Inc. are as follows. The market of Tec Solutions Inc. common stock was $89.75 on December 31, 20Y8. Price TEC SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7 20Y8 20Y7 $1,940,000 15,000 $1,925,000 780,000 $1.145,000 385,000 $1,450,000 10,000 $1,440,000 Sales Sales returns and allowances Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other income $865,000 $ 365,000 200,000 5 565,000 $ 300,000 43,000 $ 343,000 75,000 $ 268,000 40,000 215 S 600,000 545,000 25,000 Other expense (interest) Income before income tax Income tax expense Net income 115,000 $ 455,000 91,000 364,000
Explanation / Answer
1) Working capital= Current assets-Current Liabilities
2)Current ratio=Current assets/Current Liabilities
4)Accounts receivable turnover=Net Credit sales/Av. Acs. Recivables
5)Number of days sales =365/Acs.Rec.T.O.
6) Inventory turnover=COGS/Av.Inventory
7)Numbers of days sales in inventory =365/Inv.T.O.ratio
8) Ratio of fixed assets long term liabilities
9) Ratio of liabilities to Stockholders' Equity
12Ratio of net sales to assets
13) Rate earned on total assts=Net Income/Total Assets
14)Rate earned on stockholders equity =Net Income/Total equity(incl.Pref.)
15) Rate earned on common stocholders equity =Net Income/Common equity
16) Earnings per share on common stock =Net Income/Total no.Of Equity shares
17) Price Earnings ratio= Market Price per share/Earnings per share
18) Dividnds per share of common stock
19) Dividend yield = Dividend per share/Market price per share
Dec 31,20Y8 Dec 31,20Y71) Working capital= Current assets-Current Liabilities
965000-200000= 925000-419000= 765000 5060002)Current ratio=Current assets/Current Liabilities
965000/200000= 925000/419000= 4.83 2.21 3. Quick Ratio= Current assets-(Inventory&prepaid assets)/Current Liabilities (965000-(300000+50000))/200000= (925000-(260000+13000))/419000= 3.08 1.564)Accounts receivable turnover=Net Credit sales/Av. Acs. Recivables
1925000/((160000+190000)/2)= 1440000/160000= 11 95)Number of days sales =365/Acs.Rec.T.O.
365/11= 365/9= 33 416) Inventory turnover=COGS/Av.Inventory
780000/((260000+300000)/2)= 585000/260000= 3 27)Numbers of days sales in inventory =365/Inv.T.O.ratio
365/3= 365/2= 122 1838) Ratio of fixed assets long term liabilities
(400000+1135000)/1250000= (100000+875000)/750000= 1.2 1.39) Ratio of liabilities to Stockholders' Equity
1450000/1050000= 1169000/731000= 1.4 1.6 10) QUESTION NOT VISIBLE 11)No.of times preferred dividends earned=Net income before dividends/Pref.dividends 364000/5000= 228000/5000= 72.8 45.612Ratio of net sales to assets
1925000/2500000= 1440000/1900000= 0.77 0.7613) Rate earned on total assts=Net Income/Total Assets
364000/2500000= 228000/1900000= 14.56% 12.00%14)Rate earned on stockholders equity =Net Income/Total equity(incl.Pref.)
364000/1050000= 228000/731000= 34.67% 31.19%15) Rate earned on common stocholders equity =Net Income/Common equity
364000/(250000+700000)= 228000/(250000+381000)= 38.32% 36.13%16) Earnings per share on common stock =Net Income/Total no.Of Equity shares
364000/50000= 228000/50000= 7.28 4.5617) Price Earnings ratio= Market Price per share/Earnings per share
89.75/7.28= 12.3318) Dividnds per share of common stock
40000/50000= 10000/50000= 0.8 0.219) Dividend yield = Dividend per share/Market price per share
0.8/89.75= 0.89%Related Questions
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