Ex. 191
(cont.)
GROGAN COMPANY
Income Statement
For the Year Ended December 31, 2014
Net sales...............................................$400,000
Cost of goods sold........................................ 240,000
Gross profit.............................................160,000
Operating expenses.......................................42,000
Income from operations...................................118,000
Interest expense.........................................18,000
Income before income taxes................................100,000
Income tax expense....................................... 30,000
Net income.............................................$ 70,000
Additional information:
a.Cash dividends of $23,000 were declared and paid in 2014.
b.Weighted-average number of ordinary shares outstanding during 2014 was 30,000 shares.
c.Market value of ordinary shares on December 31, 2014, was $21 per share.
Instructions
Using the financial statements and additional information, compute the following ratios for Grogan Company for 2014. Show all computations.
Computations
1. Current ratio _________.
2. Return on ordinary shareholders' 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 _________.