Use the following information to calculate the ratios listed below: Total Assets 650,000 Total Liabilities 300,000 Current Assets 60,000 Current Liabilities 20,000 Net Income 70,000 Shares Outstanding 12,000 Accounts Receivable 55,000 Sales 439,000 Inventory 25,000 Dividends 10,000

Quick Ratio:
Earnings Per Share:
Return on Assets:
Debt/Equity Ratio:
Days Sales in Receivables:

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amcool amcool · Answer 1 · 2020-06-05T02:25:58+02:00

Answer:

a. Quick Ratio = 1.75

b. Earnings Per Share = $5 per share

c. Return on Assets = 10.77%

d. Debt/Equity Ratio = 85.71%

e. Days Sales in Receivables = 46 days

Explanation:

a. Quick Ratio

Quick Ratio = (Current Assets - inventory) / Current Liabilities = (60,000 - 25,000) / 20,000 = 35,000 / 20,000 = 1.75

b. Earnings Per Share

Earnings Per Share = (Net Income - Dividends) / Shares Outstanding = (70,000 - 10,000) / 12,000 = 60,000 / 12,000 = $5 per share

c. Return on Assets

Return on Assets = Net Income / Total Assets = 70,000 / 650,000 = 0.1077, or 10.77%.

d. Debt/Equity Ratio

Shareholder equity = Total Assets - Total Liabilities = 650,000 - 300,000 = 350,000

Debt/Equity Ratio = Total liabilities / Shareholder equity = 300,000 / 350,000 = 0.8571, or 85.71%.

e. Days Sales in Receivables

Days Sales in Receivables = (Accounts Receivable / Sales) * 365 = (55,000 / 439,000) * 365 = 46 days.