Reference no: EM131027508

Basic Financial Ratios

The accounting staff of CCB Enterprises has completed the financial statements for the 2014 calendar year. The statement of income for the current year and the comparative statements of financial position for 2014 and 2013 follow.

CCB Enterprises
Statement of Income
For the Year Ended December 31, 2014
(thousands omitted)
Revenue:
Net sales	$804,100
Other	61,820
Total revenue	$865,920
Expenses:
Cost of goods sold	$530,260
Research and development	24,440
Selling and administrative	155,840
Interest	19,800
Total expenses	$730,340
Income before income taxes	$135,580
Income taxes	54,232
Net income	$81,348

CCB Enterprises
Comparative Statements of Financial Position
December 31, 2014 and 2013
(thousands omitted)
	2014	2013
Assets
Current assets:
Cash and short-term investments	$26,050	$21,220
Receivables, less allowance for doubtful accounts
($1,070 in 2014 and $1,370 in 2013)	48,280	49,900
Inventories, at lower of FIFO cost or market	64,850	61,860
Prepaid items and other current assets	5,290	3,060
Total current assets	$144,470	$136,040
Other assets:
Investments, at cost	$106,020	$106,020
Deposits	10,120	7,790
Total other assets	$116,140	$113,810
Property, plant, and equipment:
Land	$12,050	$12,050
Buildings and equipment, less accumulated depreciation
($125,890 in 2014 and $122,160 in 2013)	267,410	248,300
Total property, plant, and equipment	$279,460	$260,350
Total assets	$540,070	$510,200
Liabilities and Owners' Equity
Current liabilities:
Short-term loans	$22,270	$24,250
Accounts payable	72,200	70,940
Salaries, wages, and other	26,150	27,300
Total current liabilities	$120,620	$122,490
Long-term debt	$160,570	$171,000
Total liabilities	$281,190	$293,490
Owners' equity:
Common stock, at par	$44,230	$42,290
Paid-in capital in excess of par	64,140	61,190
Total paid-in capital	$108,370	$103,480
Retained earnings	150,510	113,230
Total owners' equity	$258,880	$216,710
Total liabilities and owners' equity	$540,070	$510,200

Required:

1. Calculate the following financial ratios for 2014 for CCB Enterprises:

Round items h, j, and k to the nearest whole number. Round all other answers to two decimal places. Assume a 360-day year.

a. Times interest earned to 1

b. Return on total assets %

c. Return on common stockholders' equity %

d. Debt-to-equity ratio (at December 31, 2014) to 1

e. Current ratio (at December 31, 2014) to 1

f. Quick (acid-test) ratio (at December 31, 2014) to 1

g. Accounts receivable turnover ratio (Assume that all sales are on credit.) times

h. Number of days' sales in receivables days

i. Inventory turnover ratio (Assume that all purchases are on credit.) times

j. Number of days' sales in inventory days

k. Number of days in cash operating cycle