Answer To: OBJECTIVES Calculate the current ratio and quick ratio Calculate asset utilization ratios, including...
Ashish answered on Apr 26 2021
Sheet1
Step-1
Handout for Assignment 4.2: Calculating Ratios
INCOME STATEMENT – Fiction, INC.
Sales $2,000,000
Cost of goods sold $1,400,000
Gross profit $600,000
Operating expenses
Selling & marketing $100,000
Administrative $80,000
Depreciation exp. $50,000
Total operating expenses $230,000
Operating income (operating profits) $370,000
Interest expense $50,000
Earnings before tax $320,000
Income taxes $80,000
Net income $240,000
Total number of shares outstanding = 100,000
Current market price = $41.40
Earnings per share (EPS) = $2.40
Dividends per share = $1.10
BALANCE SHEET – Fiction, INC.
Assets
Cash $150,000
Accounts receivables $250,000
Inventory $500,000
Total Current assets $900,000
Gross plant & equip. $2,200,000
Less accumulated depreciation $650,000
Net property, Plant, & equip. $1,550,000
Total assets $2,450,000
Debt & Equity
Accounts Payable $145,000
Accruals $90,000
S.T. Notes $310,000
Total current liabilities $545,000
Long-term debt $625,000
Total debt $1,170,000
Common...