21.Harrison Company has common stock of $50,000 and retained earnings of $40,000 at yearend. During the year, 10,000 shares of stock were outstanding. Net income was reported as $5,000.
A.Calculate earnings per share.
B.How does earnings per share differ from most of the other ratios with respect to financial statements?
22.Briefly describe a company with a current ratio of 0.33 and return on equity of 0.02.
23.Taylor Company has the following financial data on January 1, 2010 and January 1, 2009.
|
1/1/10
|
1/1/09
|
Cash
|
$10,000
|
$22,000
|
Accounts receivable
|
23,000
|
11,000
|
Marketable securities
|
3,000
|
10,000
|
Inventory
|
16,000
|
35,000
|
Net plant and equipment
|
40,000
|
32,000
|
|
|
|
Current liabilities
|
$13,000
|
$22,000
|
Long-term debt
|
49,000
|
30,000
|
Shareholders' equity
|
30,000
|
58,000
|
A.In terms of the quick and current ratio, has the short-term solvency position of Taylor improved, remained the same, or declined?
B.If you were a potential short-term creditor to Taylor, would you be more willing to extend credit on either January 1, 2009 or 2010? Explain.
24.Briefly describe a company with a quick ratio of 3.78 and return on equity of 0.05.