The financial statements of Hainz Company appear below:HAINZ COMPANYComparative Balance SheetDecember 31Assets 2020 20169Cash $20,000 $40,000Short-term investments 20,000 60,000Accounts receivable (net) 40,000 30,000Inventory 60,000 70,000Property, plant and equipment (net) 260,000 300,000 Total assets $400,000 $500,000Liabilities and stockholders' equity Accounts payable $20,000 $30,000Short-term notes payable 40,000 90,000Bonds payable 80,000 160,000Common stock 150,000 150,000Retained earnings 110,000 70,000 Total liabilities and stockholders' equity $400,000 $500,000 HAINZ COMPANYIncome StatementFor the Year Ended December 31, 2020Net sales $400,000Cost of goods sold 250,000Gross profit 150,000Expenses Operating expenses $42,000 Interest expense 18,000 Total expenses 60,000Income before income taxes 90,000Income tax expense 27,000Net income $63,000Additional information:a. Cash dividends of $23,000 were declared and paid in 2020.b. Weighted-average number of shares of common stock outstanding during 2020 was 30,000 shares.c. Market value of common stock on December 31, 2020, was $21 per share.Using the financial statements and additional information, compute the following ratios for Hainz Company for 2017. (Use 365 days for calculation. Round answers to 1 decimal place, e.g. 52.7.)1. Current ratio :12. Return on common stockholders' equity %3. Price-earnings ratio times4. Acid-test ratio :15. Accounts receivable turnover times6. Times interest earned times7. Profit margin %8. Days in inventory days9. Payout ratio %10. Return on assets

1 Current Ratio = Current Asset ÷ Curret Liability = =$140,000 ÷ $60,000 = 2.33 2) Stock…

Answered: Current ratio :1 2. Return on…

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter3: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 19SP

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The financial statements of Hainz Company appear below:

HAINZ COMPANY Comparative Balance Sheet December 31
Assets		2020		20169
Cash		$20,000		$40,000
Short-term investments		20,000		60,000
Accounts receivable (net)		40,000		30,000
Inventory		60,000		70,000
Property, plant and equipment (net)		260,000		300,000
	Total assets		$400,000		$500,000
Liabilities and stockholders' equity
Accounts payable		$20,000		$30,000
Short-term notes payable		40,000		90,000
Bonds payable		80,000		160,000
Common stock		150,000		150,000
Retained earnings		110,000		70,000
	Total liabilities and stockholders' equity		$400,000		$500,000

HAINZ COMPANY Income Statement For the Year Ended December 31, 2020
Net sales		$400,000
Cost of goods sold		250,000
Gross profit		150,000
Expenses
Operating expenses	$42,000
Interest expense	18,000
Total expenses		60,000
Income before income taxes		90,000
Income tax expense		27,000
Net income		$63,000

Additional information:

a.		Cash dividends of $23,000 were declared and paid in 2020.
b.		Weighted-average number of shares of common stock outstanding during 2020 was 30,000 shares.
c.		Market value of common stock on December 31, 2020, was $21 per share.

Using the financial statements and additional information, compute the following ratios for Hainz Company for 2017. (Use 365 days for calculation. Round answers to 1 decimal place, e.g. 52.7.)

1.	Current ratio	:1
2.	Return on common stockholders' equity	%
3.	Price-earnings ratio	times
4.	Acid-test ratio	:1
5.	Accounts receivable turnover	times
6.	Times interest earned	times
7.	Profit margin	%
8.	Days in inventory	days
9.	Payout ratio	%
10.	Return on assets

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Current ratio :1 2. Return on common stockholders' equity % 3. Price-earnings ratio times 4. Acid-test ratio :1 5. Accounts receivable turnover