24 Total liabilities 25 Stockholders' equity: 26 27 Common stock Retained earnings B C E F 2,400,000 1,843,400 Par value of common stock per share 20.00 1,150,000 1,150,000 Number of shares outstanding 1,135,000 941,600 2,285,000 2,091,600 28 Total stockholders' equity 29 Total liabilities and stockholders' equity 30 31 Required: 32 compute the following ratios for the current year only: 33 Gross margin percentage 34 Current ratio (rounded to two decimal places) 35 Acid-test ratio (rounded to two decimal places) 37 4,685,000 $ 3,935,000 36 Accounts receivable turnover (rounded to two decimal places) Average collection period (rounded to the nearest whole day) Inventory turnover ratio (rounded to two decimal places) 38 39 40 Average sales period (rounded to the nearest whole day) Debt-to-equity ratio (rounded to two decimal places) 41 Times interest earned (rounded to two decimal places) 42 Book value per share (rounded to two decimal places) Earnings per share (rounded to two decimal places) 43 44 Dividend payout ratio (rounded to three decimal places) 45 Dividend yield ratio (rounded to three decimal places) 46 Price-earnings ratio (rounded to two decimal places) 1 2 3 4 B C [ E A Recent financial statements for Zimmer, Inc. are as follows: Zimmer Company Comparative Balance Sheet 5 Assets 6 Current assets: 7 Cash 8 Marketable securities 9 Accounts receivable, net 10 Inventory 11 Other current assets 12 Total current assets 13 Plant and equipment, net 14 Other assets 15 Total assets 16 Liabilities and Stockholders' Equity 17 Current Liabilities: 18 Accounts payable 19 Short-term bank loans 20 Accrued payables 21 Other current liabilities 22 Total current liabilities 23 Bonds payable, 10% This Year Last Year F Zimmer Company Income Statement This Year $ 360,000 $ 310,000 Sales (all on account) $4,980,000 220,000 80,000 Cost of goods sold 2,988,000 775,000 700,000 Gross margin 1,992,000 925,000 355,000 195,000 750,000 Selling and administrative expenses Operating expenses 985,500 2,635,000 2,035,000 Depreciation and amortization 410,500 1,975,000 1,800,000 General and administrative expenses 150,000 75,000 100,000 Total selling and administrative expenses 1,546,000 4,685,000 $ 3,935,000 Net operating income 446,000 Interest expense Net income before taxes 60,000 386,000 $ 250,000 $ 225,000 Income taxes 750,000 600,000 Net income 135,100 $ 250,900 550,000 395,000 275,000 223,400 Additional information: 1,825,000 575,000 1,443,400 Dividend per share paid in current year 400,000 $ 1.00 Market price of shares at year end 42.00

24 Total liabilities 25 Stockholders' equity: 26 27 Common stock Retained earnings B C E F 2,400,000 1,843,400 Par value of common stock per share 20.00 1,150,000 1,150,000 Number of shares outstanding 1,135,000 941,600 2,285,000 2,091,600 28 Total stockholders' equity 29 Total liabilities and stockholders' equity 30 31 Required: 32 compute the following ratios for the current year only: 33 Gross margin percentage 34 Current ratio (rounded to two decimal places) 35 Acid-test ratio (rounded to two decimal places) 37 4,685,000 $ 3,935,000 36 Accounts receivable turnover (rounded to two decimal places) Average collection period (rounded to the nearest whole day) Inventory turnover ratio (rounded to two decimal places) 38 39 40 Average sales period (rounded to the nearest whole day) Debt-to-equity ratio (rounded to two decimal places) 41 Times interest earned (rounded to two decimal places) 42 Book value per share (rounded to two decimal places) Earnings per share (rounded to two decimal places) 43 44 Dividend payout ratio (rounded to three decimal places) 45 Dividend yield ratio (rounded to three decimal places) 46 Price-earnings ratio (rounded to two decimal places) 1 2 3 4 B C [ E A Recent financial statements for Zimmer, Inc. are as follows: Zimmer Company Comparative Balance Sheet 5 Assets 6 Current assets: 7 Cash 8 Marketable securities 9 Accounts receivable, net 10 Inventory 11 Other current assets 12 Total current assets 13 Plant and equipment, net 14 Other assets 15 Total assets 16 Liabilities and Stockholders' Equity 17 Current Liabilities: 18 Accounts payable 19 Short-term bank loans 20 Accrued payables 21 Other current liabilities 22 Total current liabilities 23 Bonds payable, 10% This Year Last Year F Zimmer Company Income Statement This Year $ 360,000 $ 310,000 Sales (all on account) $4,980,000 220,000 80,000 Cost of goods sold 2,988,000 775,000 700,000 Gross margin 1,992,000 925,000 355,000 195,000 750,000 Selling and administrative expenses Operating expenses 985,500 2,635,000 2,035,000 Depreciation and amortization 410,500 1,975,000 1,800,000 General and administrative expenses 150,000 75,000 100,000 Total selling and administrative expenses 1,546,000 4,685,000 $ 3,935,000 Net operating income 446,000 Interest expense Net income before taxes 60,000 386,000 $ 250,000 $ 225,000 Income taxes 750,000 600,000 Net income 135,100 $ 250,900 550,000 395,000 275,000 223,400 Additional information: 1,825,000 575,000 1,443,400 Dividend per share paid in current year 400,000 $ 1.00 Market price of shares at year end 42.00

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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