RATIO ANALYSIS OF COMPARATIVE FINANCIAL STATEMENTS Refer to the financial statements in Problem 24-8B. REQUIRED Calculate the

Question:

RATIO ANALYSIS OF COMPARATIVE FINANCIAL STATEMENTS Refer to the financial statements in Problem 24-8B.

REQUIRED

Calculate the following ratios and amounts for 20-1 and 20-2 (round all calculations to two decimal places).

(a) Return on assets (Total assets on January 1, 20-1, were $111,325.)

(b) Return on common stockholders’ equity (Total common stockholders’ equity on

January 1, 20-1, was $82,008.)

(c) Earnings per share of common stock (The average numbers of shares outstanding were 6,300 shares in 20-1 and 6,900 in 20-2.)

(d) Book value per share of common stock

(e) Quick ratio

(f) Current ratio

(g) Working capital

(h) Receivables turnover (Net receivables on January 1, 20-1, were $28,995.)

(i) Merchandise inventory turnover (Merchandise inventory on January 1, 20-1, was $32,425.)

(j) Debt-to-equity ratio

(k) Asset turnover (Assets on January 1, 20-1, were $111,325.)

(l) Times interest earned ratio

(m) Profit margin ratio

(n) Assets-to-equity ratio

(o) Price-earnings ratio (The market price of the common stock was $120.00 and $110.00 on December 31, 20-2 and 20-1, respectively.)

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... 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... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.