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Dillon Company: Compute 13 separate ratios

See attached file also.

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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ANSWERS
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Solution Summary

The expert computes 13 separate ratios for Dillion Company.

$2.19