Question Details

The financial statements of Albert Company 



Ex. 1
The financial statements of Albert Company appear below:
ALBERT COMPANY
Comparative Balance Sheet
December 31,
———————————————————————————————————————————
Assets 2002 2001
Cash ............................................................................................... $ 25,000 $ 40,000
Short-term investments .................................................................. 15,000 60,000
Accounts receivable (net) ............................................................... 50,000 30,000
Inventory ........................................................................................ 50,000 70,000
Property, plant and equipment (net) ............................................... 260,000 300,000
Total assets .............................................................................. $400,000 $500,000
Liabilities and stockholders' equity
Accounts payable ........................................................................... $ 20,000 $ 30,000
Short-term notes payable ............................................................... 30,000 90,000
Bonds payable ................................................................................ 90,000 160,000
Common stock ............................................................................... 150,000 150,000
Retained earnings .......................................................................... 110,000 70,000
Total liabilities and stockholders' equity..................................... $400,000 $500,000
ALBERT COMPANY
Income Statement
For the Year Ended December 31, 2002
Net sales ........................................................................................ $400,000
Cost of goods sold .......................................................................... 240,000
Gross profit ..................................................................................... 160,000
Expenses
Interest expense ....................................................................... $18,000
Selling expenses ...................................................................... 28,000
Administrative expenses ........................................................... 24,000
Total expenses ................................................................... 70,000
Income before income taxes .......................................................... 90,000
Income tax expense ....................................................................... 27,000
Net income ..................................................................................... $ 63,000
Additional information:
a. Cash dividends of $23,000 were declared and paid in 2002.
b. Weighted-average number of shares of common stock outstanding during 2002 was 30,000
shares.
c. Market value of common stock on December 31, 2002, was $21 per share.
d. Net cash provided by operating activities for 2002 was $60,000.
Instructions
Using the financial statements and additional information, compute the following ratios for Albert
Company for 2002. Show all computations.
Computations
1. Current ratio _________.
2. Return on common stockholders' equity _________.
3. Price-earnings ratio _________.
4. Acid-test ratio _________.
5. Receivables turnover _________.
6. Times interest earned _________.
7. Profit margin ratio _________.
8. Average days in inventory _________.
9. Payout ratio _________.
10. Return on assets _________.
11. Cash return on sales ratio _________.
12. Cash debt coverage ratio _________.




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