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    Calculate Financial Ratios

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    Use the following information from the current year financial statements of a company to calculate the ratios below:

    (a) Current ratio.
    (b) Accounts receivable turnover. (Assume the prior year's accounts receivable balance was $100,000.)
    (c) Days' sales uncollected.
    (d) Inventory turnover. (Assume the prior year's inventory was $50,200.)
    (e) Times interest earned ratio.
    (f) Return on common stockholders' equity. (Assume the prior year's common stock balance was $480,000 and the retained earnings balance was $128,000.)
    (g) Earnings per share (assuming the corporation has a simple capital structure, with only common stock outstanding).
    (h) Price earnings ratio. (Assume the company's stock is selling for $26 per share.)
    (i) Divided yield ratio. (Assume that the company paid $1.25 per share in cash dividends.)

    Income Statement data:

    Sales (all on credit).................................... $1,075,000
    Cost of goods sold................................. 575,000
    Gross profits on sales................................500,000
    Operating expenses.................................. 305,000
    Operating income...................................... 195,000
    Interest expense........................................ 20,400
    Income before taxes.................................. 174,600
    Income taxes.............................................. 74,000
    Net income................................................. 100,600

    Balance sheet data:

    Cash.............................................................. $ 38,400
    Accounts Receivable................................. 120,000
    Inventory..................................................... 56,700
    Prepaid Expenses....................................... 24,000
    Total current assets................................... 239,100
    Total plant assets...................................... 708,900
    Total assets................................................. 948,000
    Accounts payable...................................... 91,200
    Interest payable....................................... 4,800
    Long-term liabilities.................................. 204,000
    Total Liabilities........................................... 300,000
    Common stock, $10 par............................. 480,000
    Retained earnings........................................ 168,000
    Total liabilities and equity.......................... 948,000

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