ACC 205 Week 5 Exercise 6 Ratio computation

ACC 205 Week 5 Exercise 6 Ratio computation

Ratio computation. The financial statements of the Lone Pine Company follow.

LONE PINE COMPANY Comparative Balance Sheets December 31, 20X2 and 20X1 ($000 Omitted)
20X2	20X1
Assets
Current Assets
Cash and Short-Term Investments	$ 400	$ 600
Accounts Receivable (net)	3,000	2,400
Inventories	2,000	2,200
Total Current Assets	$5,400	$5,200
Property, Plant, and Equipment
Land	$1,700	$ 600
Buildings and Equipment (net)	1,500	1,000
Total Property, Plant, and Equipment	$3,200	$1,600
Total Assets	$8,600	$6,800
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable	$1,800	$1,700
Notes Payable	1,100	1,900
Total Current Liabilities	$2,900	$3,600
Long-Term Liabilities
Bonds Payable	4,100	2,100
Total Liabilities	$7,000	$5,700
Stockholders’ Equity
Common Stock	$ 200	$ 200
Retained Earnings	1,400	900
Total Stockholders’ Equity	$1,600	$1,100
Total Liabilities and Stockholders’ Equity	$8,600	$6,800

 

LONE PINE COMPANY Statement of Income and Retained Earnings For the Year Ending December 31,20X2 ($000 Omitted)
Net Sales*	$36,000
Less: Cost of Goods Sold	$20,000
Selling Expense	6,000
Administrative Expense	4,000
Interest Expense	400
Income Tax Expense	2,000	32,400
Net Income	$ 3,600
Retained Earnings, Jan. 1	900
$ 4,500
Cash Dividends Declared and Paid	3,100
Retained Earnings, Dec. 31	$ 1,400
*All sales are on account.

Instructions

Compute the following items for Lone Pine Company for 20X2, rounding all calcu­lations to two decimal places when necessary:

1. Quick ratio
2. Current ratio
3. Inventory-turnover ratio
4. Accounts-receivable-turnover ratio
5. Return-on-assets ratio
6. Net-profit-margin ratio
7. Return-on-common-stockholders’ equity
8. Debt-to-total assets
9. Number of times that interest is earned
10. Dividend payout rate

 

 

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