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    Financial Statement Analysis of the Gaines Company

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    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.

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    Solution Summary

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