Problem 13-23A Ratio analysis LO 13-2, 13-3, 13-4, 13-5

The following financial statements apply to Jordan Company:

	Year 4				Year 3
Revenues
Net sales	$	212,000			$	175,100
Other revenues		8,200				6,600
Total revenues		220,200				181,700
Expenses
Cost of goods sold		125,300				102,000
Selling expenses		20,500				18,500
General and administrative expenses		10,700				9,700
Interest expense		2,900				2,900
Income tax expense		20,000				16,500
Total expenses		179,400				149,600
Net income	$	40,800			$	32,100
Assets
Current assets
Cash	$	4,600			$	7,300
Marketable securities		2,500				2,500
Accounts receivable		36,400				30,500
Inventories		100,300				94,100
Prepaid expenses		3,600				2,600
Total current assets		147,400				137,000
Plant and equipment (net)		105,900				105,900
Intangibles		20,700				0
Total assets	$	274,000			$	242,900
Liabilities and Stockholders Equity
Liabilities
Current liabilities
Accounts payable	$	39,100			$	54,400
Other		16,900				16,500
Total current liabilities		56,000				70,900
Bonds payable		65,700				66,700
Total liabilities		121,700				137,600
Stockholders equity
Common stock (50,000 shares)		113,000				113,000
Retained earnings		39,300				(7,700	)
Total stockholders equity		152,300				105,300
Total liabilities and stockholders equity	$	274,000			$	242,900

Required Calculate the following ratios for Year 3 and Year 4. Since Year 2 numbers are not presented do not use averages when calculating the ratios for Year 3. Instead, use the number presented on the Year 3 balance sheet. a. Net margin. (Round your answers to 2 decimal places.) b. Return on investment. (Round your answers to 2 decimal places.) c. Return on equity. (Round your answers to 2 decimal places.) d. Earnings per share. (Round your answers to 2 decimal places.) e. Price-earnings ratio (market prices at the end of Year 3 and Year 4 were $6.02 and $4.85, respectively). (Round your intermediate calculations and final answers to 2 decimal places.) f. Book value per share of common stock. (Round your answers to 2 decimal places.) g. Times interest earned. Exclude extraordinary income in the calculation as they cannot be expected to recur and, therefore, will not be available to satisfy future interest payments.(Round your answers to 2 decimal places.) h. Working capital. i. Current ratio. (Round your answers to 2 decimal places.) j. Quick (acid-test) ratio. (Round your answers to 2 decimal places.) k. Accounts receivable turnover. (Round your answers to 2 decimal places.) l. Inventory turnover. (Round your answers to 2 decimal places.) m. Debt-to-equity ratio. (Round your answers to 2 decimal places.) n. Debt-to-assets ratio. (Round your answers to the nearest whole percent.)

		year4		year3
a	net margin		%		%
b	return on investment		%		%
c	return on equity		%		%
d	earnings per share
e	price-earning ratio		times		times
f	book value
g	interest earned		times		times
h	working capital
I	current ratio
j	quick (acid-test) ratio
k	accounts receivable turnover		times		times
l	inventory turnover		times		times
m	debt-to-equity ratio
n	debt-to-assets ratio		%		%