Share
Explore BrainMass

Financial Statement Analysis of the Gaines Company

The following information has been taken from the financial statements of the Gaines Company. Gaines Company has only issued common stock

Net Income $ 60,000
Total Assets January 1 20X9 $500,000
Total Liabilities. December 31, 20X9 $175.000
Net Sales $900.000
Interest Expense $ 20,000
Current Assets, December31, 20X9 $175,000
Current Liabilities, December 31, 20X9 $ 75,000
Income Tax Expense $ 25,000
Total Assets, December31, 20X9 $ 575,000
Stockholders' Equity, January 2, 20X9 $ 300,000
Stockholders' Equity, December 31, 20X9 $ 400,000
Common shares outstanding for 20X9 $ 100,000

Use the given data for the Gaines Company to calculate the following
ratios for 20X9.
a) rate of return on total assets
b) rate of return on common stockholders' equity.
c) rate of return on net sales.
d) times-interest?earned ratio.
e) debt ratio, December 31, 20X9.
f) current ratio, December31, 20X9.
g) earnings per share of common stock.

Solution Summary

This solution is comprised of a detailed explanation to prepare Financial Statement Analysis of the Gaines Company through financial ratios.

$2.19