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2. Current ratio x 3. Debt-to-equity ratio x

2. Current ratio x 3. Debt-to-equity ratio x

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Whats the equation to find current ratio when current assets isnt given? Also how do you find debit to equity ratio in this kind of problem?

Ratios Compared with Industry Averages Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report Dec. 31, 2013 Dec. 31, 2012 Quick assets $552,000 $600,000 372,000 Inventory and prepaid expenses 312,000 Other assets 4,176,000 4,788,000 $5,760,000 Total Assets $5,040,000 Current liabilities $624,000 $540,000 10% Bonds payable 1,440,000 1,440,000 8% Preferred stock, $100 par value 480,000 480,000 Common stock, $10 par value 2,700,000 2,160,000 Retained earnings 516,000 420,000 $5,040,000 Total Liabilities and Stockholders' Equity $5,760,000 For 2013, net sales amount to $11,280,000, net income is $573,600, and preferred stock dividends paid are $38,400. Required Calculate the following ratios for 2013. Round answers to two decimal places. 1. Return on sales 5.09 % 2. Current ratio 3. Debt-to-equity ratio X Check
Transcribed Image Text:Ratios Compared with Industry Averages Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report Dec. 31, 2013 Dec. 31, 2012 Quick assets $552,000 $600,000 372,000 Inventory and prepaid expenses 312,000 Other assets 4,176,000 4,788,000 $5,760,000 Total Assets $5,040,000 Current liabilities $624,000 $540,000 10% Bonds payable 1,440,000 1,440,000 8% Preferred stock, $100 par value 480,000 480,000 Common stock, $10 par value 2,700,000 2,160,000 Retained earnings 516,000 420,000 $5,040,000 Total Liabilities and Stockholders' Equity $5,760,000 For 2013, net sales amount to $11,280,000, net income is $573,600, and preferred stock dividends paid are $38,400. Required Calculate the following ratios for 2013. Round answers to two decimal places. 1. Return on sales 5.09 % 2. Current ratio 3. Debt-to-equity ratio X Check
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It says to round it to two decimal places which I did and its still says its wrong? Is there something else I need to do?

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