Ratio computation. The financial statements of the Lone Pine Company follow.
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LONE PINE COMPANY Comparative Balance Sheets December 31, 20X2 and 20X1 ($000 Omitted) |
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20X2 |
20X1 |
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Assets |
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Current Assets |
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Cash and Short Term Investments |
$ 400 |
$ 600 |
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Accounts Receivable (net) |
3,000 |
2,400 |
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Inventories |
2,000 |
2,200 |
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Total Current Assets |
$5,400 |
$5,200 |
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Property, Plant, and Equipment |
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Land |
$1,700 |
$ 600 |
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Buildings and Equipment (net) |
1,500 |
1,000 |
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Total Property, Plant, and Equipment |
$3,200 |
$1,600 |
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Total Assets |
$8,600 |
$6,800 |
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Liabilities and Stockholders’ Equity |
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Current Liabilities |
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Accounts Payable |
$1,800 |
$1,700 |
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Notes Payable |
1,100 |
1,900 |
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Total Current Liabilities |
$2,900 |
$3,600 |
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Long Term Liabilities |
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Bonds Payable |
4,100 |
2,100 |
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Total Liabilities |
$7,000 |
$5,700 |
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Stockholders’ Equity |
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Common Stock |
$ 200 |
$ 200 |
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Retained Earnings |
1,400 |
900 |
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Total Stockholders’ Equity |
$1,600 |
$1,100 |
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Total Liabilities and Stockholders’ Equity |
$8,600 |
$6,800 |
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LONE PINE COMPANY Statement of Income and Retained Earnings For the Year Ending December 31,20X2 ($000 Omitted) |
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Net Sales* |
$36,000 |
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Less: Cost of Goods Sold |
$20,000 |
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Selling Expense |
6,000 |
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Administrative Expense |
4,000 |
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Interest Expense |
400 |
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Income Tax Expense |
2,000 |
32,400 |
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Net Income |
$ 3,600 |
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Retained Earnings, Jan. 1 |
900 |
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$ 4,500 |
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Cash Dividends Declared and Paid |
3,100 |
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Retained Earnings, Dec. 31 |
$ 1,400 |
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*All sales are on account. |
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Instructions
Compute the following items for Lone Pine Company for 20X2, rounding all calcuA?lations to two decimal places when necessary:
a. Quick ratio
b. Current ratio
c. Inventory turnover ratio
d. Accounts receivable turnover ratio
e. Return on assets ratio
f. Net profit margin ratio
g. Return on common stockholders’ equity
h. Debt to total assets
i. Number of times that interest is earned