Business Assignment- Lone Pine Company

Business Assignment- Lone Pine Company

6. Ratio computation. The financial statements of the Lone Pine Company follow.
   LONE PINE COMPANY
   Comparative Balance Sheets
   December 31, 20X2 and 20X1 ($000 Omitted)
   20X2 20X1
   Assets
   Current Assets
   Cash and Short-Term Investments $400 $600 
   Accounts Receivable (net) 3,000 2,400
   Inventories 3,000 2,300
   Total Current Assets $6,400 $5,300 
   Property, Plant, and Equipment 
   Land $1,700 $500 
   Buildings and Equipment (net) 1,500 1,000
   Total Property, Plant, and Equipment $3,200 $1,500 
   Total Assets $9,600 $6,800 
   Liabilities and Stockholders’ Equity 
   Current Liabilities 
   Accounts Payable $2,800 $1,700 
   Notes Payable 1,100 1,900
   Total Current Liabilities $3,900 $3,600 

Long-Term Liabilities 
Bonds Payable 4,100 2,100
Total Liabilities $8,000 $5,700 
Stockholders’ Equity 
Common Stock $200 $200 
Retained Earnings 1,400 900
Total Stockholders’ Equity $1,600 $1,100 
Total Liabilities and Stockholders’ Equity $9,600 $6,800 
LONE PINE COMPANY
Statement of Income and Retained Earnings
For the Year Ending December 31,20X2 ($000 Omitted)
Net Sales* $36,000 
Less: Cost of Goods Sold $20,000 
Selling Expense 6,000
Administrative Expense 4,000
Interest Expense 400
Income Tax Expense 2,000 32,400
Net Income $3,600 
Retained Earnings, Jan. 1 900
Ending Retained Earnings $4,500 
Cash Dividends Declared and Paid 3,100
Retained Earnings, Dec. 31 $1,400 
*All sales are on account. 

Instructions 
Compute the following items for Lone Pine Company for 20X2, rounding all calcu¬lations to two decimal places when necessary: 
a. Quick ratio 
b. Current ratio 
c. Inventory-turnover ratio 
d. Accounts-receivable-turnover ratio 
e. Return-on-assets ratio 
f. Net-profit-margin ratio 
g. Return-on-common-stockholders’ equity 
h. Debt-to-total assets