Solution-Compute the return on assets and current ratios

Compute the return on assets and current ratios

Assignment Help Financial Accounting

Reference no: EM131129689

The comparative statements of Lucille Company are presented here.

LUCILLE COMPANY Income Statements For the Years Ended December 31
	2012	2011
Net sales	$1,890,540	$1,750,500
Cost of goods sold	1,058,540	1,006,000
Gross profit	832,000	744,500
Selling and administrative expenses	500,000	479,000
Income from operations	332,000	265,500
Other expenses and losses Interest expense	22,000	20,000
Income before income taxes	310,000	245,500
Income tax expense	92,000	73,000
Net income	$ 218,000	$ 172,500

Compute ratios from balance sheets and income statements. (SO 6), AP

LUCILLE COMPANY Balance Sheets 31-Dec
Assets	2012	2011
Current assets
Cash	$60,100	$64,200
Short-term investments	74,000	50,000
Accounts receivable	117,800	102,800
Inventory	126,000	115,500
Total current assets	377,900	332,500
Plant assets (net)	649,000	520,300
Total assets	$1,026,900	$852,800
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$160,000	$145,400
Income taxes payable	43,500	42,000
Total current liabilities	203,500	187,400
Bonds payable	220,000	200,000
Total liabilities	423,500	387,400
Stockholders' equity
Common stock ($5 par)	290,000	300,000
Retained earnings	313,400	165,400
Total stockholders' equity	603,400	465,400
Total liabilities and stockholders' equity	$1,026,900	$852,800

All sales were on account. Net cash provided by operating activities for 2012 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

Instructions

Compute the following ratios for 2012.

1. Earnings per share.
2. Return on common stockholders' equity.
3. Return on assets.
4. Current ratio.
5. Receivables turnover.
6. Average collection period.
7. Inventory turnover.
8. Days in inventory.
9. Times interest earned.
10. Asset turnover.
11. Debt to total assets.
12. Current cash debt coverage.
13. Cash debt coverage.
14. Free cash flow.

Reference no: EM131129689

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Compute the return on assets and current ratios

Reference no: EM131129689

Reference no: EM131129689

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