Determine the number of times interest charges earned


Balance Sheet at the end of the current year are as follows

Assets

Cash                                                                                              $100,000

Marketable Securities                                                                    50,000

Accounts Receivable                                                                     150,000

Merchandise Inventory                                                                  100,000

Prepaid expenses                                                                          20,000

Fixed Assets                                                                                  600,000

Liabilities and Stockholders' Equity

Accounts Payable                                                                          $100,000

Note payable (short-term, non-interest-bearing)                            20,000

Accrued liabilities                                                                            30,000

Bonds payable, 11%, due in 2012                                                200,000

Common stock, $10 par                                                               300,000

Paid-in capital in excess of par-common stock                             30,000

Retained earnings                                                                         140,000

Selected data related to the 12 months of the current year indicate the following

Average accounts receivable                                                      $150,000

Average merchandise inventory                                                    105,000

Average stockholders' equity                                                        500,000

Average total assets                                                                     900,000

Cash dividends paid on common stock                                         55,000

Cost of goods sold                                                                      1,000,000

Income before income tax                                                             165,000

Interest expense                                                                             25,000

Net Income                                                                                   140,000

Net sales (on account)                                                               1,500,000

The common stock was selling for $65 per share at the end of the current year

Instructions: Compute the analytical measures listed below, round to one decimal point.

  1. Quick ratio?
  2. Current ratio?
  3. Inventory turnover?
  4. Accounts receivable turnover?
  5. Rate earned on total assets?
  6. Rate earned on stockholders equity?
  7. Number of times interest charges earned?
  8. Earnings per share on common stock?
  9. Price-earnings ratio on common stock?
  10. Dividend yield on common stock?

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Accounting Basics: Determine the number of times interest charges earned
Reference No:- TGS0684068

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