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    Compute ROA, current ratio, acid-test, profit margin

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    Eagle Company Balance Sheet as of December 31 (millions) 2007 2008 2009
    Assets
    Cash $2.6 $1.8 $1.6
    Government securities 0.4 0.2 0
    Accounts and notes receivable 8 8.5 8.5
    Inventories 2.8 3.2 2.8
    Prepaid assets 0.7 0.6 0.6
    Total current assets $14.5 $14.3 $13.5
    Property, plant, and equipemnt (net) 4.3 5.4 5.9
    total assets $18.8 $19.7 $19.4
    Liabilites and Shareholder's equity
    Notes payable $3.2 $3.7 $4.2
    Accounts payable $2.8 $3.7 $4.1
    Accured expenses $0.9 $1.1 $1.0
    Total current liabilities $6.9 $8.5 $9.3
    Long-term debt 6% interest $3.0 $2.0 $1.0
    Total liabilities $9.9 $10.5 $10.3
    Shareholders'equity $8.9 $9.2 $9.1
    Total liabilities and shareholders' equity $18.8 $19.7 $19.4
    Income Statement for the Year's Ended December 31 (in millions)
    Net Sales $24.2 $24.5 $24.9
    Cost of goods sold $(16.9) $(17.2) $(18.0)
    Gross margin $7.3 $7.3 6.9
    Selling and administrative expenses (6.6) (6.8) (7.3)
    Earnings (loss) before taxes $0.7 $0.5 $(0.4)
    Income taxes $(0.3) $(0.2) $0.2
    Net income $0.4 $0.3 $(0.2)

    A. What is the rate of return on total assets for 2009 ?
    B. What is the current ratio for 2009 ?
    C. What is the quick(acid-test) ratio for 2009 ?
    D.What is the profit margin 2008 ?
    E.What is the profit margin 2009 ?
    F. What is the inventory turnover for 2008?
    G. What is the inventory turnover for 2009?
    H.What is the rate of return on stockholders equtiy for 2008?
    I. What is the rate of return on stockholders equtiy for 2009?
    J. What is the debt-equity ratio for 2009?

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    A. What is the rate of return on total assets for 2009 ?
    B. What is the current ratio for 2009 ?
    C. What is the ...

    Solution Summary

    Response helps in computation of ROA, current ratio, acid-test, profit margin, inventory turnover, debt-equity ratio

    $2.19

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