Reference no: EM13337594
1. Selected financial ratios.
The following information pertains to Allbright, Inc.
Cash $53,000
Accounts receivable $186,000
Inventory $82,000
Plant assets (net) $320,000
Total assets $641,000
Accounts payable $85,000
Accrued taxes and expenses payable $12,000
Long-term debt $365,000
Common stock ($10 par) $120,000
Paid-in capital in excess of par $6,000
Retained earnings $150,000
Total equities $641,000
Net sales (all on credit) $980,000
Cost of goods sold $760,000
General & Admin Expenses $160,000
Net income $60,000
Required
Compute the following: (It is not necessary to use averages for any balance sheet figures involved.)
(a) Current ratio
(b) Inventory turnover
(c) Receivables turnover
(d) Book value per share
(e) Earnings per share
(f) Debt to total assets
(g) Profit margin on sales
(h) Return on common stock equity
2. Please describe the requirements for a change in accounting principle and at least four reasons why companies might implement a change in accounting principle.