Reference no: EM131563494
Question - Computation of selected ratios.
The following data is given:
December 31,
2016 2015
Cash $ 68,000 $ 50,000
Accounts receivable (net) 70,000 60,000
Inventories 90,000 130,000
Plant assets (net) 383,000 325,000
Accounts payable 60,000 40,000
Salaries and wages payable 10,000 5,000
Bonds payable 70,000 70,000
10% Preferred stock, $40 par 100,000 100,000
Common stock, $10 par 120,000 90,000
Paid-in capital 80,000 65,000
Retained earnings 170,000 175,000
Net credit sales 800,000
Cost of goods sold 600,000
Net income 80,000
Instructions - Compute the following ratios:
(a) Acid-test ratio at 12/31/16.
(b) Receivables turnover in 2016.
(c) Inventory turnover in 2016.
(d) Profit margin on sales in 2016.