Reference no: EM131751347

Problem - Ratios Compared with industry Averages

Because you own the common stock of Phantom Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report:

	Dec. 31, 2016	Dec. 31, 2015
Quick assets	$700,000	$552,000
Inventory and prepaid expenses	372,000	312,000
Other assets	4,788,000	4,200,000
Total Assets	$5,860,000	$5,064,000
Current liabilities	$724,000	$564,000
10% Bonds payable	1,440,000	1,440,000
8% Preferred stock, $100 par value	480,000	480,000
Common stock, $10 par value	2,700,000	2,160,000
Retained earnings	516,000	420,000
Total Liabilities and Stockholders' Equity	$5,860,000	$5,064,000

For 2016, net sales amount to $11,280,000, net income is $575,000, and preferred stock dividends paid are $42,000.

Required -

Calculate the following ratios for 2016.

1. Return on sales

2. Return on assets

3. Return on common stockholders' equity

4. Quick ratio

5. Current ratio

6. Debt-to-equity ratio