Q1) The information given below has been taken from financial statements of Gaines Company. Gaines Company has only issued common stock.
| Net income |
$ 70,000 |
| Total assets, January 1, 20X9 |
500,000 |
| Total liabilities, December 31, 20X9 |
175,000 |
| Net sales |
900,000 |
| Interest expense |
20,000 |
| Current assets, December 31, 20X9 |
150,000 |
| Current liabilities, December 31, 20X9 |
75,000 |
| Income tax expense |
25,000 |
| Total assets, December 31, 20X9 |
575,000 |
| Stockholders' equity, January 1, 20X9 |
300,000 |
| Stockholders' equity, December 31, 20X9 |
400,000 |
| Common shares outstanding for 20X9 |
100,000 |
Use given data for Gaines Company to compute following ratios for 20X9:
a) Rate of return on total assets
b) Rate of return on common stockholders' equity
c) Rate of return on net sales
d) Times-interest-earned ratio
e) Debt ratio, December 31, 20X9
f) Current ratio, December 31, 20X9
g) Earnings per share of common stock