Because you own the common stock of Jacob Corporation, a paper manufacturer, you decide to analyze the firm's performance for the most recent year. The following data are taken from the firm's latest annual report:

For 2019 , net sales amount to \(\$ 12,500,000\), net income is \(\$ 550,000\), and preferred stock dividends paid are \(\$ 50,000\).

Required

a. Calculate the following ratios for 2019:

1. Return on sales 

2. Return on assets 

3. Return on common stockholders' equity 

4. Quick ratio 

5. Current ratio 

6. Debt-to-equity ratio

b. Trade association statistics and information provided by credit agencies reveal the following data on industry norms:

Compare Jacob Corporation's performance with industry performance.

Transcribed Image Text:

Quick assets. Inventory and prepaid expenses Other assets... Total assets Current liabilities... 10% bonds payable 8% Preferred stock, $100 par value. Common stock, $10 par value... Retained earnings .... Total liabilities and stockholders' equity. Dec. 31, 2019 Dec. 31, 2018 $ 700,000 372,000 4,788,000 $5,860,000 $ 724,000 1,440,000 480,000 2,700,000 516,000 $5,860,000 $ 552,000 312,000 4,200,000 $5,064,000 $ 564,000 1,440,000 480,000 2,160,000 420,000 $5,064,000