Reference no: EM132473617
Problem - Below are the comparative balance sheets for 2017 and 2018 as well as the income statement for 2018 for Walstead Company.
2018 2017 Income statement
Sales revenue $920,000
Cost of goods sold 480,000
Gross profit 440,000
Operating expenses 150,000
Pretax income 290,000
Income tax 69,600
Net income $220,400
Balance sheet -
Cash $26,000 $6,000
Accounts receivable (net) 40,000 38,000
Merchandise inventory 15,000 20,000
Prepaid-expenses 1000 500
Fixed assets (net) 220,000 200,000
$302,000 $264,500
Accounts payable $17,000 $18,000
Income taxes payable 1,000 1,000
Bonds payable 90,000 100,000
Common stock 100,000 100,000
Retained earnings 94,000 45,500
$302,000 $264,500
*Assume the following. Interest expense is $8,000. The market price of stock on December 31, 2018 is $28.00. The income tax rate is 24%. The average number of shares outstanding over 2018 is 15,000 shares.
Required - Using this information, calculate each of the following ratios (show as decimals to four places - do not show as percentages):
1. Profit margin
2. Return on assets
3. Return on equity
4. Earnings per share
5. Price/earnings ratio
6. Current ratio
7. Quick ratio
8. Acid test ratio
9. Debt-to-equity ratio
10. Accounts receivable turnover
11. A/R days until received.