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    Dillon Company: Compute 13 separate ratios

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    P18-6A
    The comparative statements of Dillon Company are presented below.

    DILLON COMPANY
    Income Statement

    For the Year Ended December 31
    2009 2008
    Net sales (all on account)

    $600,000

    $520,000
    Expenses
    Cost of goods sold 415,000 354,000
    Selling and administrative 120,800 114,800
    Interest expense 7,800 6,000
    Income tax expense

    18,000

    14,000
    Total expenses

    561,600

    488,800
    Net income

    $ 38,400

    $ 31,200

    DILLON COMPANY
    Balance Sheets

    December 31
    Assets 2009 2008
    Current assets
    Cash $ 21,000 $ 18,000
    Short-term investments 18,000 15,000
    Accounts receivable (net) 86,000 74,000
    Inventory

    90,000

    70,000
    Total current assets

    215,000

    177,000
    Plant assets (net)

    423,000

    383,000
    Total assets

    $638,000

    $560,000

    Liabilities and Stockholders' Equity
    Current liabilities
    Accounts payable $122,000 $110,000
    Income taxes payable

    23,000

    20,000
    Total current liabilities

    145,000

    130,000
    Long-term liabilities
    Bonds payable

    120,000

    80,000
    Total liabilities

    265,000

    210,000
    Stockholders' equity
    Common stock ($5 par) 150,000 150,000
    Retained earnings

    223,000

    200,000
    Total stockholders' equity

    373,000

    350,000
    Total liabilities and stockholders' equity

    $638,000

    $560,000

    Additional data:
    The common stock recently sold at $19.50 per share.
    The year-end balance in the allowance for doubtful accounts was $3,000 for 2009 and $2,400 for 2008.

    Instructions

    Compute the following ratios for 2009. (Round acid-test ratio and earnings per share to 2 decimal places and all other answers to 1 decimal place.)

    (a) Current :1
    (b) Acid-test :1
    (c) Receivables turnover times
    (d) Inventory turnover times
    (e) Profit margin %
    (f) Asset turnover times
    (g) Return on assets %
    (h) Return on common stockholders' equity %
    (i) Earnings per share $
    (j) Price-earnings times
    (k) Payout %
    (l) Debt to total assets %
    (m) Times interest earned times

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    https://brainmass.com/business/financial-ratios/dillon-company-compute-separate-ratios-279934

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    Solution Summary

    The expert computes 13 separate ratios for Dillion Company.

    $2.19

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