The financial statement of company ABC appears below:

ABC COMPANY
Comparative Balance Sheet
December 31, 2020
Assets				2020	2019
Cash				$20,000	$40,000
Short-Term Investment				20,000	60,000
Account Recievable, net				40,000	30,000
Inventory				60,000	70,000
Property, Plant, and Equipment, Net				260,000	300,000
Total Assets				$400,000	$500,000
Liabilities and Stock Holder Equity
Account Payable				$20,000	$30,000
Short-Term note Payable				40,000	90,000
Bonds Payable				80,000	160,000
Common Stock				150,000	150,000
Retained Earnings				110,000	70,000
Total liabilities and Stockholder Equity				$400,000	$500,000

ABC COMPANY
Income Statement
For The Year Ended December 31, 2020
Net Sales				$400,000
Cost of Goods sold				250,000
Gross Profit				150,000
Expenses
Operating Expenses			$42,000
Interest Expense			18,000	60,000
Income Before Income taxes				90,000
Income tax expense				27,000
Net Income				$63,000

Additional Information:

A. Cash dividends of $23,000 were declared and paid in 2020.

b. Weighted-average number of shares of common stock outstanding during 2020 was 30,000 shares.

c. Market value of the common stock on December 31, 2020, was $21 per share

Using the financial statements and additional information above, compute the ratios listed on the following page for ABC Company for 2020. Show all computations

Transcribed Image Text:

1.Current ratio 2.Return on common stockholders equity 3.Price-earnings ratio 4.Acid-test ratio 5.Accounts receivable turnover 6.Times interest earned 7.Profit margin 8.Days in inventory 9.Payout ratio 10.Return on assets 1.Current ratio 2.Return on common stockholders equity 3.Price-earnings ratio 4.Acid-test ratio 5.Accounts receivable turnover 6.Times interest earned 7.Profit margin 8.Days in inventory 9.Payout ratio 10.Return on assets

Answer rating: 100% (QA)

1 Current Ratio Current Ratio Current AssetsCurrent Liabilities CashShortterm investmentAccount Reci... View the full answer