Hokie had net income of $28 million for 2010 and paid total cash dividends of $20 million to their common stockholders.

 

Calculate the following 2010 financial ratios of Aggie Corporation using the information given 

i.	current ratio

ii.	acid test ratio

iii.	debt ratio

iv.	return on total assets

v.	return on common equity

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Hokie Corporation Comparative Balance Sheet For the Years Ending December 31, 2009 and 2010 (Millions of Dollars) Assets Current Assets: Cash Accounts receivable Inventory Total current assets Gross fixed assets: Less accumulated depreciation Net fixed assets Total assets Liabilities and owners' equity: Current liabilities: Accounts payable Notes payable Long-term debt Owners' equity Common stock Retained eamings Total current liabilities Total liabilities and owners' equity 2009 $2 16 22 $40 $120 (60) 60 $100 $16 10 $26 20 40 14 $100 2010 $10 12 26 $48 $124 (64) 60 $108 $18 10 $28 18 40 22 $108 Hokie Corporation Comparative Balance Sheet For the Years Ending December 31, 2009 and 2010 (Millions of Dollars) Assets Current Assets: Cash Accounts receivable Inventory Total current assets Gross fixed assets: Less accumulated depreciation Net fixed assets Total assets Liabilities and owners' equity: Current liabilities: Accounts payable Notes payable Long-term debt Owners' equity Common stock Retained eamings Total current liabilities Total liabilities and owners' equity 2009 $2 16 22 $40 $120 (60) 60 $100 $16 10 $26 20 40 14 $100 2010 $10 12 26 $48 $124 (64) 60 $108 $18 10 $28 18 40 22 $108

Answer rating: 100% (QA)

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