(Answered) Calculating Financial Ratios

The financial statements of Lewis Company appear below;LEWIS COMPANY;Comparative Balance Sheet;December 31;Assets 2010 2009;Cash $ 25,000 $ 40,000;Marketable securities 20,000 60,000;Accounts receivable (net) 40,000 30,000;Inventory 150,000 170,000;Property, plant and equipment (net) 170,000 200,000;Total assets $405,000 $500,000;Liabilities and stockholders' equity;Accounts payable $ 25,000 $ 30,000;Short-term notes payable 40,000 90,000;Bonds payable 75,000 160,000;Common stock 175,000 145,000;Retained earnings 90,000 75,000;Total liabilities and stockholders' equity $405,000 $500,000;LEWIS COMPANY;Income Statement;For the Year Ended December 31, 2010;Net sales (all on credit) $360,000;Cost of goods sold 184,000;Gross profit 176,000;Expenses;Interest expense $21,000;Selling expenses 30,000;Administrative expenses 20,000;Total expenses 71,000;Income before income taxes 105,000;Income tax expense 30,000;Net income $ 75,000;Additional information;a. Cash dividends of $50,000 were declared and paid on common stock in 2010.;b. Weighted-average number of shares of common stock outstanding during 2010 was 62,000 shares.;c. Market value of common stock on December 31, 2010, was $15 per share.;d. Net cash provided by operating activities for 2010 was $65,000.;Instructions;Using the financial statements and additional information, compute 5 of the following ratios for the Lewis Company for 2010. Show all computations.;1. Current ratio _________.;2. Return on common stockholders' equity _________.;3. Profit margin ratio _________.;4. Return on assets _________.;5. Cash debt coverage ratio _________.;Attachments;377040.docx
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Calculating Financial Ratios

 


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