Compute the specified ratios using Faustin Companys balance sheet for 2014. Assets Cash .............. $ 18,000 Marketable

Question:

Compute the specified ratios using Faustin Company’s for 2014.
Assets
Cash .............. $ 18,000
Marketable securities ......... 12,000
Accounts receivable ........ 25,000
Inventory ............ 22,000
Property and equipment ....... 160,000
Accumulated depreciation ....... (37,000)
Total assets ........... $200,000
Liabilities and Stockholders’ Equity
Accounts payable ......... .. $ 11,500
Current notes payable ........ 3,500
Mortgage payable ......... 4,000
Bonds payable ........... 21,500
.......... 100,000
Retained earnings 5........ 9,500
Total liabilities and stockholders’ equity...$200,000

The average number of common stock shares outstanding during 2014 was 880 shares. Net income for the year was $20,000.

Required
Compute each of the following and round computations to two decimal points:
a. Current ratio
b. Earnings per share
c. Quick (acid-test) ratio
d. Return on investment
e. Return on equity
f. Debt to equity ratio

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...