The financial statements for Castile Products, Inc. are given below:
Balance Sheet
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Assets
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Current Assets:-
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Cash
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$6,500
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Accounts receivable, net
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$35,000
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Merchandise Inventory
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$70,000
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Prepaid expenses
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$3,500
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Total Current Assets
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$115,000
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Property and equipment, net
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$185,000
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Total assets
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$300,000
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Liabilities and Stockholder's Equity:-
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Liabilities:
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Current liabilities
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$50,000
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Bond payable, 10%
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$80,000
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Total Liabilities
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$130,000
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Stockholders' equity:
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Common stock $5 par value
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$30,000
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Retained Earnings
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$140,000
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Total stockholders' equity
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$170,000
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Total liabilities and equity
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$300,000
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Castile Products
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Income Statement
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Sales
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$420,000
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Cost of goods sold
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$292,500
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Selling and administrative expenses
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$89,500
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Net Operating Income
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$38,000
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Interest expense
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$8,000
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Income taxes (30%)
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$9,000
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Net Income
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$21,000
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Account balances at the beginning of the year were: accounts receivable $25,000, inventory $60,000. all sales were on account.
Required:
Compute financial ratios as follows:
1. Gross margin percentage
2. Current ratio
3. Acid-test ratio
4. Debt-to-equity ratio
5. Average collection period
6. Average sale period
7. Times interest earned ratio
8. Book value per share