ch2-hwsolutions

ch2-hwsolutions - (i) Return on total assets = ($239,935 +...

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Solutions of problems assigned in Chapter 2 Chapter 2 4, 7, 9 2.4 (a) Debt ratio = ($922,653 + $113,186)/$4,834,690 = 42.10% (b) Time-interest-earned ratio = ($432,342 + $36,479)/$36,479 = 12.85 times (c) Current ratio = $3,994,084/$1,113,186 = 3.59 times (d) Quick ratio = ($3,994,084 - $1,080,083)/$1,113,186 = 2.62 times (e) Inventory turn over ratio = $8,391,409/(($1,080,083 + $788,519)/2) = 8.98 times (f) DSO = ($1,123,901 - $5,580)/($8,391,409/360) = 47.98 days (g) Total assets turnover ratio = $8,391,409/$4,834,696 = 1.74 times (h) Profit margin on sales = $293,935/$8,391,409 = 3.5%
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Unformatted text preview: (i) Return on total assets = ($239,935 + $36,479(1 0.3201))/(($4,834,696 + $2,410,568)/2) = 8.80% (j) Return on common equity = $293,935/(($2,793,091 + $1,181,326)/2) = 14.79% (k) Price-Earning ratio = $65/$1.13 = $57.52 Note: Assumed a share price of $65. The stock prices were fluctuating between $78.93 and $52.25 during the fourth quarter. (l) Book value per share = $2,793,091,000/247,004,200 = $11.30 (Note: The total outstanding number of shares in year 2005 was 247,004,200.) 2.7 Answer is (b) 2.9 Answer is (b)...
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