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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Required: Compute the following for Year 2:
- Earnings per share of common stock
- Price-earnings ratio
- Dividend payout ratio
- Dividend yield ratio
- Return on total assets
- Return on common
stockholders' equity - Book value per share
Working capital Current ratio - Acid-test (quick) ratio
Accounts receivable turnover- Average collection period (age of receivables)
- Inventory turnover
- Average sale period (turnover in days)
- Times interest earned
- Debt-to-equity ratio

Transcribed Image Text:The financial statements of ABC Company are as follows:
Income Statement
(in '000)
Year 2
Sales (all on account)
2,300
Cost of goods sold
1,610
Gross margin
690
Operating expenses
270
Net operating income
420
Interest expense
30
Net income before taxes
390
Income taxes
117
Net income
273

Transcribed Image Text:Dividends during Year 2 totaled P153,000, of wnich P10,000 was preferred dividends. The market price of a snare of common stock on December 31, Year 2 was P210.
Balance Sheets (in '000)
ASSETS
Year 2
Year 1
Current Assets
Cash
130
120
Receivables
180
180
Inventories
170
180
Other current assts
20
500
20
Total current assets
500
Noncurrent assets
Property and equipment, net
2,000
1,930
Total noncurrent assets
2,000
1,930
Total assets
2,500
2,430
LIABILITIES and EQUITY
Current liabilities
Accounts payable
130
160
Accrued liabilities
30
60
Notes payable, short term
130
130
Total current liabilities
290
350
Noncurrent liabilities
Bonds payable
Total noncurrent liabilities
310
300
310
300
Total liabilities
600
650
Stockholders' equity
Preferred stock, P10 par, 10%
100
100
Common stock
180
180
Additional paid-in capital -
common
160
160
Retained earnings
1460
1340
Total equity
1900
1780
Total Liabilities and Equity
2,500
2,430
Expert Solution
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