Harmony Corporation reported these figures:

Harmony has 2,500 shares of common stock outstanding. Its stock has traded recently at $30.80 per share. You would like to gain a better understanding of Harmony Corporation's financial position. Assume all sales are on credit.

a. Inventory turnover

b. Day's sales in receivables

c. Acid- test ratio

d. Times- interest- earned

e. Return on stockholder's equity

f. Earnings per share

g. Price/ earnings ratio

Transcribed Image Text:

Harmony Corporation Balance Sheets December 31, 2014 and 2013 (amounts in thousands) 2014 Harmony Corporation Income Statement For the Year Ended December 31, 2014 (amounts in thousands) 2. 3. 4 2013 2014 13,140 1.980 11,160 660 10,500 Assets 6 7 Current assets: 8 Cash 9 Accounts receivable 10 Inventory 11 Other current assets 12 5,700 S 2,100 1,000 3.950 12,750 S 23,500 36,250 S 2,700 1,860 800 2,640 8,000 20,000 28,000 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Income before income taxes Less: Income tax expense Net income 500 Total current assets 13 Other assets 14 Total assets 15 10,000 7,000 3,000 Liabilities 16 17 Total current liabilities 18 Long-term liabilities 19 Total liabilities 20 15,000 S 6,250 is 12,500 5.500 18,000 21,250 $ Stockholders' equity 21 22 Total common stockholders' equity 23 24 Total liabilities and equity 25 15,000 10,000 36,250 S 28,000 Harmony Corporation Balance Sheets December 31, 2014 and 2013 (amounts in thousands) 2014 Harmony Corporation Income Statement For the Year Ended December 31, 2014 (amounts in thousands) 2. 3. 4 2013 2014 13,140 1.980 11,160 660 10,500 Assets 6 7 Current assets: 8 Cash 9 Accounts receivable 10 Inventory 11 Other current assets 12 5,700 S 2,100 1,000 3.950 12,750 S 23,500 36,250 S 2,700 1,860 800 2,640 8,000 20,000 28,000 Sales revenues Less: Cost of goods sold Gross profit Less: Operating expenses Operating income Less: Interest expense Income before income taxes Less: Income tax expense Net income 500 Total current assets 13 Other assets 14 Total assets 15 10,000 7,000 3,000 Liabilities 16 17 Total current liabilities 18 Long-term liabilities 19 Total liabilities 20 15,000 S 6,250 is 12,500 5.500 18,000 21,250 $ Stockholders' equity 21 22 Total common stockholders' equity 23 24 Total liabilities and equity 25 15,000 10,000 36,250 S 28,000

Answer rating: 100% (QA)

FORMULA Cost of goods sold Average inventory Cost of g... View the full answer