Items 1 through 5 are based on the following information:
The data presented below show actual figures for selected accounts of McKeon Company for the fiscal year ended May 31, 2005, and selected budget figures for the 2006 fiscal year. McKeon’s controller is in the process of reviewing the 2006 budget. McKeon Company monitors yield or return ratios using the average financial position of the company. (Round all calculations to three decimal places if necessary.)
|
5/31/06 |
5/31/05 |
|
|
Current assets |
$210,000 |
$180,000 |
|
Noncurrent assets |
275,000 |
255,000 |
|
Current liabilities |
78,000 |
85,000 |
|
Long-term debt |
75,000 |
30,000 |
|
Common stock ($30 par value) |
300,000 |
300,000 |
|
Retained earnings |
32,000 |
20,000 |
|
2006 Operations |
|
|
Sales |
$350,000 |
|
Cost of goods sold |
160,000 |
|
Interest expense |
3,000 |
|
Income taxes (40% rate) |
48,000 |
|
Dividends declared and paid in 2006 |
60,000 |
|
Administrative expense |
67,000 |
|
Current Assets |
||
|
5/31/06 |
5/31/05 |
|
|
Cash |
$ 20,000 |
$10,000 |
|
Accounts receivable |
100,000 |
70,000 |
|
Inventory |
70,000 |
80,000 |
|
Other |
20,000 |
20,000 |
McKeon Company’s debt-to-total-asset ratio for 2006 is
- 0.352
- 0.315
- 0.264
- 0.237
The 2006 accounts receivable turnover for McKeon company is
- 1.882
- 3.500
- 5.000
- 4.118
Using a 365-day year, McKeon’s inventory turnover is
- 2.133
- 2.281
- 1.995
- 4.615
McKeon Company’s total asset turnover for 2006 is
- 0.805
- 0.761
- 0.722
- 0.348
The 2006 return on assets for McKeon Company is
- 0.261
- 0.148
- 0.157
- 0.166