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Problem 4-4 Financial Ratios
The Balance Sheet and the Income Statement for ABC Manufacturing Corporation are as follows:
DATA (All amounts in SAR unless otherwise indicated, all sales are on credit and no hard keys.)
Balance Sheet:
ABC Corporation Balance Sheet
2019
Cash
310
Accounts receivable
685
Inventories
600
Other current assets
105
Total current assets
1,700
Gross fixed assets
3,750
Accumulated depreciation
-1,500
Net fixed assets
2,250
Total assets
3,950
LIABILITIES (DEBT) AND EQUITY
Accounts payable
350
Short-term notes payable
250
Total current liabilities
Long-term debt
950
Total liabilities
1,550
Common stock (par & paid in capital)
1,050
Retained earnings
1,475
Total common equity
2,400
Total liabilities and equity
ABC Corporation Income Statement
Sales
6,000
Cost of goods sold
-3,700
Gross profits
2,300
Operating expenses:
Selling and G&A expenses
-820
Depreciation expenses
-340
Total operating expenses
-1,160
Operating income (earnings before interest and taxes)
1,140
Interest expense
-200
Earnings before taxes
940
Income taxes
-230
Net Income
710
Number of shares (thousands)
160
Dividends (thousands)
120
Market price per share
40
Calculate the following ratios:
Current ratio
Acid-test ratio
Days in receivables
Days in inventories
Operating return on assets
Operating profit margin
Total asset turnover
Fixed asset turnover
Debt ratio
Times interest earned
Return on equity
Earnings per share
Dividends per share
Price/Earnings
Book value per share
Market/Book
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