Matthew_McCoy_Problem 17-4A

# Matthew_McCoy_Problem 17-4A - (7 times interest earned =...

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Matthew McCoy Problem 17-4A (1) current ratio = current assets/current liabilities 101,450/29,600 = 3.4 (2) acid-test ratio = (cash + short-term investments + current receivables)/current liabilities (20,000 + 8,200 + 36,400)/29,600 = 2.2 (3) days' sales uncollected = (accounts receivable, net/net sales) X 365 (29,400/456,600) X 365 = 23.5 (4) inventory turnover = cost of goods sold/average inventory 297,450/([56,900+34,150]/2) = 6.5 (5) days' sales in inventory = (ending inventory/cost of goods sold) X 365 (34,150/294,450) X 365 = 42.3 (6) debt-to-equity ratio = total liabilities/total equity (21,500 + 4,400 + 3,700 + 67,400)/(85,000 + 66,750) = 0.64

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Unformatted text preview: (7) times interest earned = income before interest expense and income taxes/interest expense 59,750/3,900 = 15.3 (8) profit margin ratio = net income/net sales 33,351/456,600 = 0.073 or 7.3% (9) total asset turnover = net sales/average total assets 456,600/([219,400 + 248,750]/2) = 1.95 (10) return on total assets = net income/average total assets 33,351/([219,400 + 248,750]/2) = 0.142 or 14.2% (11) return on common stockholders' equity = (net income - preferred dividends)/avg. common stockholders' equity (33,351 - 0)/([137,348 + 151,750]/2) = 0.2307 or 23.1% e n...
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Matthew_McCoy_Problem 17-4A - (7 times interest earned =...

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