Problem 14-3A a

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergan Corporation

Balance Sheets

December 31

2020

2019

2018

Cash

$29,300

$16,400

$17,300

Accounts receivable (net)

49,800

45,900

47,000

Other current assets

89,600

94,300

63,800

Investments

55,800

69,200

45,600

Plant and equipment (net)

499,600

370,200

357,400

$724,100

$596,000

$531,100

Current liabilities

$84,200

$80,800

$70,300

Long-term debt

145,900

84,500

49,900

Common stock, $10 par

333,000

314,000

314,000

Retained earnings

161,000

116,700

96,900

$724,100

$596,000

$531,100

Jergan Corporation

Income Statement

For the Years Ended December 31

2020

2019

Sales revenue

$736,500

$605,500

Less: Sales returns and allowances

39,500

30,000

Net sales

697,000

575,500

Cost of goods sold

425,500

367,500

Gross profit

271,500

208,000

Operating expenses (including income taxes)

180,890

150,450

Net income

$90,610

$57,550

Additional information:

1.

The market price of Jergan's common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively.2.

You must compute dividends paid. All dividends were paid in cash.

(a)

Compute the following ratios for 2019 and 2020. Where necessary, compute a simple average number of shares to approximate the weighted average number of shares. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)

2019

2020

(1)

Profit margin

enter a percentage number rounded to 1 decimal place

%

enter a percentage number rounded to 1 decimal place

%(2)

Gross profit rate

enter a percentage number rounded to 1 decimal place

%

enter a percentage number rounded to 1 decimal place

%(3)

Asset turnover

enter a number rounded to 2 decimal places

times

enter a number rounded to 2 decimal places

times(4)

Earnings per share

$enter a dollar amount rounded to 2 decimal places

$enter a dollar amount rounded to 2 decimal places

(5)

Price-earnings ratio

enter a number rounded to 1 decimal place

times

enter a number rounded to 1 decimal place

times(6)

Payout ratio

enter a percentage number rounded to 0 decimal places

%

enter a percentage number rounded to 0 decimal places

%(7)

Debt to assets ratio

enter a percentage number rounded to 0 decimal places

%

enter a percentage number rounded to 0 decimal places

%