Please answer the missing blanks. Thank you! 10.55% a. Return on equity (use ave
ID: 1171423 • Letter: P
Question
Please answer the missing blanks. Thank you!
10.55% a. Return on equity (use average balance sheet figures) b. Return on assets (use average balance sheet figures) c. Return on capital (use average balance sheet figures) d. Days in inventory (use start-of-year balance sheet figures) e. Inventory turnover (use start-of-year balance sheet figures) f. Average collection period (use start-of-year balance sheet figures) g. Operating profit margin h. Long-term debt ratio (use end-of-year balance sheet figures) i. Total debt ratio (use end-of-year balance sheet figures) j. Times interest earned k. Cash coverage ratio I. Current ratio (use end-of-year balance sheet figures) m. Quick ratio (use end-of-year balance sheet figures) 6.95 % 22.90 days 15.93 70.00 days 14.011% 3.41 7.23 0.81 58.90Explanation / Answer
Answer c.
Beginning Capital = Beginning Long-term Debt and Leases + Beginning Stockholders’ Equity
Beginning Capital = $5,222 + $10,921
Beginning Capital = $16,143
Ending Capital = Ending Long-term Debt and Leases + Ending Stockholders’ Equity
Ending Capital = $4,777 + $12,424
Ending Capital = $17,201
Average Capital = (Beginning Capital + Ending Capital) / 2
Average Capital = ($16,143 + $17,201) / 2
Average Capital = $16,672
Return on Capital = [Net Income + Interest Expense*(1-tax)] / Average Capital
Return on Capital = [$1,232 + $730*(1-0.30)] / $16,672
Return on Capital = $1,743 / $16,672
Return on Capital = 10.45%
Answer h.
Long-term Debt Ratio = Ending Long-term Debt and Leases / Ending Capital
Long-term Debt Ratio = $4,777 / $17,201
Long-term Debt Ratio = 27.78%
Answer i.
Ending Total Debt = Ending Total Current Liabilities + Ending Long-term Debt and Leases + Ending Other Long-term Liabilities
Ending Total Debt = $4,974 + $4,777 + $6,268
Ending Total Debt = $16,019
Total Debt Ratio = Ending Total Debt / Ending Total Assets
Total Debt Ratio = $16,019 / $28,443
Total Debt Ratio = 56.32%