Reference no: EM132524882

Canadian Bacon Inc. financial statements are presented in the table below.

Question 1: Based on the information in the table, calculate the firm's Basic Earning Power ratio. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

Balance Sheet December 31, 2011

Cash and marketable securities $143,000

Accounts payable $278,000

Accounts receivable $354,000

Notes payable $87,000

Inventories $672,000

Accrued expenses $65,000

Prepaid expenses $12,500

Total current liabilities $430,000

Total current assets $1,181,500

Long-term debt $284,000

Gross fixed assets $1,675,000

Par value and paid-in-capital $228,000

Less: accumulated depreciation $500,000

Retained Earnings $1,414,500

Net fixed assets $1,175,000

Common Equity 1,642,500

Total assets $2,356,500

Total liabilities and owner's equity $2,356,500

Income Statement Year of 2011

Net sales (all credit) $3,136,600.00

Less: Cost of goods sold $2,195,620.00

Selling and administrative expenses $345,000.00

Depreciation expense $146,000.00

EBIT $449,980.00

Interest expense $45,300.00

Earnings before taxes $404,680.00

Income taxes $161,872.00

Net income $242,808.00