Problem 3-37 Ratio computation and analysis [LO3-2]

Given the financial statements for Jones Corporation and Smith Corporation:

JONES CORPORATIONCurrent AssetsLiabilitiesCash$20,700Accounts payable$145,000Accounts receivable89,400Bonds payable (long term)88,100Inventory55,500Long-Term AssetsStockholders' EquityGross fixed assets$594,000Common stock$150,000Less: Accumulated depreciation152,600Paid-in capital70,000Net fixed assets*441,400Retained earnings153,900Total assets$607,000Total liabilities and equity$607,000

Sales (on credit)$1,344,000Cost of goods sold828,000Gross profit$516,000Selling and administrative expense257,000Depreciation expense54,000Operating profit$205,000Interest expense9,500Earnings before taxes$195,500Tax expense95,700Net income$99,800

*Use net fixed assets in computing fixed asset turnover.

Includes $11,700 in lease payments.

SMITH CORPORATIONCurrent AssetsLiabilitiesCash$38,100Accounts payable$75,600Marketable securities10,700Bonds payable (long term)233,000Accounts receivable76,900Inventory81,700Long-Term AssetsStockholders' EquityGross fixed assets$516,000Common stock$75,000Less: Accumulated depreciation252,500Paid-in capital30,000Net fixed assets*263,500Retained earnings57,300Total assets$470,900Total liabilities and equity$470,900

*Use net fixed assets in computing fixed asset turnover.

SMITH CORPORATIONSales (on credit)$1,050,000Cost of goods sold606,000Gross profit$444,000Selling and administrative expense276,000Depreciation expense55,700Operating profit$112,300Interest expense23,600Earnings before taxes$88,700Tax expense53,200Net income$35,500

Includes $11,700 in lease payments.

a.Compute the following ratios.(Use a 360-day year. Do not round intermediate calculations. Input your profit margin, return on assets, return on equity, and debt to total assets answers as a percent rounded to 2 decimal places. Round all other answers to 2 decimal places.)

For BOTH Jones and Smith Corp. Find:

Current Ratio (times)

Quick Ratio (times)

Fixed Charge Coverage (times)