Ch 1 Solution Problem 1- 9

Ch 1 Solution Problem 1- 9 - UCLA Extension FIN 432 Problem...

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UCLA Extension FIN 432 Problem 1-9 Year 5 Year 4 At December 31: Current ratio. ...................................................... 2.30 1.95 Acid-test ratio . ................................................. 1.05 0.80 Book value per share. ....................................... $12.50 $10.18 Year ended December 31: Gross profit margin ratio. ................................. 35% 30% Days to sell inventory. ....................................... 82 86 Times interest earned. ....................................... 18.0 12.5 Price-to-earnings ratio. ..................................... 17.5 15.4 .... $1,105,000 $975,000 Supporting computations: a............................................................. Current ratio: Current assets . .................................................................. $13,570,000 $12,324,000 ÷ Current liabilities. ............................................................ $ 5,900,000 $ 6,320,000 Current ratio ........................................................................................ 2.3 1.95 b. Acid-test ratio: Cash, marketable sec., accts. rec. (net). ........................... $6,195,000 $5,056,000 ÷ Current liabilities. ............................................................ $5,900,000 $6,320,000 Acid-test ratio ................................................................................... 1.05
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Ch 1 Solution Problem 1- 9 - UCLA Extension FIN 432 Problem...

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