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Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio

Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 3SEA: ANALY SIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1A, compute the...
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The financial statements of El Camino Company appear below: EL CAMINO COMPANY Comparative Balance Sheet December 31, Assets Cash Debt investments Accounts receivable (net) Inventory Property, plant and equipment (net) Total assets Liabilities and stockholders' equity Accounts payable Short-term notes payable Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity.. Net sales (all on credit) Cost of goods sold Gross profit Expenses EL CAMINO COMPANY Income Statement For the Year Ended December 31, 2021 Interest expense Selling expenses Administrative expenses Total expenses Income before income taxes Income tax expense Net income 2021 $ 25,000 20,000 50,000 140,000 170,000 $405.000 $ 25,000 40,000 75,000 160,000 105,000 $405.000 $11,000 30,000 20,000 2020 $ 40,000 60,000 30,000 C. The market price of common stock on December 31, 2021, was $16 per share. d. Net cash provided by operating activities for 2021 was $70,000. 170,000 200.000 $500.000 $ 30,000 90,000 160,000 145,000 75,000 $500.000 $360,000 184,000 176,000 61.000 115,000 35,000 $80.000 Ex. 238 (Cont.) Additional information: a. Cash dividends of $50,000 were declared and paid on common stock in 2021. b. The weighted-average number of shares of common stock outstanding during 2021 was 50,000.
Transcribed Image Text:The financial statements of El Camino Company appear below: EL CAMINO COMPANY Comparative Balance Sheet December 31, Assets Cash Debt investments Accounts receivable (net) Inventory Property, plant and equipment (net) Total assets Liabilities and stockholders' equity Accounts payable Short-term notes payable Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity.. Net sales (all on credit) Cost of goods sold Gross profit Expenses EL CAMINO COMPANY Income Statement For the Year Ended December 31, 2021 Interest expense Selling expenses Administrative expenses Total expenses Income before income taxes Income tax expense Net income 2021 $ 25,000 20,000 50,000 140,000 170,000 $405.000 $ 25,000 40,000 75,000 160,000 105,000 $405.000 $11,000 30,000 20,000 2020 $ 40,000 60,000 30,000 C. The market price of common stock on December 31, 2021, was $16 per share. d. Net cash provided by operating activities for 2021 was $70,000. 170,000 200.000 $500.000 $ 30,000 90,000 160,000 145,000 75,000 $500.000 $360,000 184,000 176,000 61.000 115,000 35,000 $80.000 Ex. 238 (Cont.) Additional information: a. Cash dividends of $50,000 were declared and paid on common stock in 2021. b. The weighted-average number of shares of common stock outstanding during 2021 was 50,000.
Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio 4. Inventory turnover 5. Accounts receivable turnover 6. Times interest earned 7. Profit margin 8. Days in inventory 9. Payout ratio 10. Return on assets
Transcribed Image Text:Instructions Using the financial statements and additional information, compute the following ratios for the El Camino Company for 2021. Show all computations. Computations 1. Current ratio 2. Return on common stockholders' equity 3. Price-earnings ratio 4. Inventory turnover 5. Accounts receivable turnover 6. Times interest earned 7. Profit margin 8. Days in inventory 9. Payout ratio 10. Return on assets
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