FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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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