Compute the return on common stockholders equity ratios

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Reference no: EM13887650

The comparative statements of Larker Tool Company are presented below.

               Larker Tool Company Income Statement                 For the Years Ended December  31


2014

2013

Net sales

$1,818,500

$1,750,500

Cost of goods sold

1,011,500

996,000

Gross profit

807,000

754,500

Selling and administrative expense

516,000

479,000

Income from operations Other expenses and losses

291,000

275,500

Interest expense

15,000

14,000

Income before income taxes

276,000

261,500

Income tax expense

84,000

77,000

Net income

$ 192,000

$   184,500

Larker Tool Company Balance Sheets December 31

Assets

2014

2013

Current assets Cash

$ 60,100

$  64,200

Short-term investments

69,000

50,000

Accounts receivable (net)

105,750

102,800

Inventory 

110,950

115,500

Total current assets

345,800

332,500

Plant assets (net)

600,300

520,300

Total assets

$946,100

$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

200,000

200,000

Total liabilities

403,500

387,400

Stockholders' equity Common stock ($5 par)

300,000

300,000

Retained earnings

242,600

165,400

Total stockholders' equity

542,600

465,400

Total liabilities and stockholders' equity

$946,100

$852,800

All sales were on account.

Instructions

Compute the following ratios for 2014. (Weighted-average common shares in 2014 were 60,000.)

(a) Earnings per share.

(b) Return on common stockholders' equity.

(c) Return on assets.

(d) Current.

(e) Acid-test.

(f) Receivables turnover.

(g) Inventory turnover.

(h) Times interest earned.

(i) Asset turnover.

(j) Debt to total assets.

Reference no: EM13887650

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