ACC 205 week 5 #6 Ratio computation
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6. Ratio computation. The financial statements of the Lone Pine Company follow. |
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LONE PINE COMPANY |
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Comparative Balance Sheets |
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December 31, 20X2 and 20X1 ($000 Omitted) |
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20X2 |
20X1 |
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Assets |
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Current Assets |
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Cash and Short-Term Investments |
$400 |
$600 |
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Accounts Receivable (net) |
3,000 |
2,400 |
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Inventories |
3,000 |
2,300 |
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Total Current Assets |
$6,400 |
$5,300 |
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Property, Plant, and Equipment |
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Land |
$1,700 |
$500 |
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Buildings and Equipment (net) |
1,500 |
1,000 |
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Total Property, Plant, and Equipment |
$3,200 |
$1,500 |
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Total Assets |
$9,600 |
$6,800 |
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Liabilities and Stockholders’ Equity |
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Current Liabilities |
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Accounts Payable |
$2,800 |
$1,700 |
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Notes Payable |
1,100 |
1,900 |
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Total Current Liabilities |
$3,900 |
$3,600 |
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Long-Term Liabilities |
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Bonds Payable |
4,100 |
2,100 |
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Total Liabilities |
$8,000 |
$5,700 |
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Stockholders’ Equity |
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Common Stock |
$200 |
$200 |
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Retained Earnings |
1,400 |
900 |
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Total Stockholders’ Equity |
$1,600 |
$1,100 |
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Total Liabilities and Stockholders’ Equity |
$9,600 |
$6,800 |
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LONE PINE COMPANY |
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Statement of Income and Retained Earnings |
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For the Year Ending December 31,20X2 ($000 Omitted) |
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Net Sales* |
$36,000 |
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Less: Cost of Goods Sold |
$20,000 |
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Selling Expense |
6,000 |
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Administrative Expense |
4,000 |
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Interest Expense |
400 |
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Income Tax Expense |
2,000 |
32,400 |
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Net Income |
$3,600 |
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Retained Earnings, Jan. 1 |
900 |
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Ending Retained Earnings |
$4,500 |
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Cash Dividends Declared and Paid |
3,100 |
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Retained Earnings, Dec. 31 |
$1,400 |
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*All sales are on account. |
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Instructions
Compute the following items for Lone Pine Company for 20X2, rounding all calcuÂlations to two decimal places when necessary:
a. Quick ratio
b. Current ratio
c. Inventory-turnover ratio
d. Accounts-receivable-turnover ratio
e. Return-on-assets ratio
f. Net-profit-margin ratio
g. Return-on-common-stockholders’ equity
h. Debt-to-total assets
i. Number of times that interest is earned