Reference no: EM131901853
Assignment
1. CVS Stores Inc. has assets of $5,960,000 and turns over its assets 1.9 times per year. Return on assets is 8 percent. What is the firm's profit margin (return on sales)?
2. Diagnostics Corporation of America income statement for 2015 is presented below:
Sales....................................................................................... $2,790,000
Cost of goods sold................................................................. 1,790,000
Gross profit........................................................................... 1,000,000
Selling and administrative expense......................................... 302,000
Operating profit..................................................................... 698,000
Interest expense..................................................................... 54,800
Income before taxes............................................................... 643,200
Taxes (30%)........................................................................... 192,960
Income after taxes.................................................................. $ 450,240
Compute the profit margin for 2015.
3. Orlando Imaging Center Corporation has total assets of $1,500,000 and current assets of $612,000. It turns over its fixed assets three times a year. It has $319,000 of debt. Its return on sales is 8 percent. What is its return on stockholders' equity?
4. The balance sheet for Medical Equipment Inc., is shown next. Sales for the year were $2,400,000, with 90 percent of sales sold on credit.
Medical Equipment Inc.
|
Balance Sheet 200X
|
Assets
|
Liabilities and Equity
|
Cash........................
|
$ 60,000
|
Accounts payable.................
|
$ 220,000
|
Accounts receivable......
|
240,000
|
Accrued taxes.....................
|
30,000
|
Inventory..................
|
350,000
|
Bonds payable (long-term)........................
|
150,000
|
Plant and equipment......
|
410,000
|
Common stock....................
|
80,000
|
|
|
Paid-in capital.....................
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200,000
|
|
|
Retained earnings.................
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380,000
|
Total assets............
|
$1,060,000
|
Total liabilities and equity...
|
$1,060,000
|
Compute the following ratios:
Current ratio.
Quick ratio.
Debt-to-total-assets ratio.
Asset turnover.
Average collection period.
5. A firm has net income before interest and taxes of $193,000 and interest expense of $28,100.
What is the times-interest-earned ratio?