Dillon Company: Compute 13 separate ratios
Not what you're looking for?
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
Purchase this Solution
Solution Summary
The expert computes 13 separate ratios for Dillion Company.
Solution Preview
ANSWERS
Please see attached file for answers.
Please see ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.