Marginal Co. Income Statement for the Year Ended December 31st 2009 2008 Sales $
ID: 2348062 • Letter: M
Question
Marginal Co.Income Statement
for the Year Ended December 31st 2009 2008
Sales $ 500,000 $ 495,000
Cost of Goods Sold 200,000 220,000
Gross Profit 300,000 275,000
Operating Expenses 175,000 180,000
Operating Income 125,000 95,000
Interest Expense 15,500 20,000
Income Tax Expense 18,750 14,250
Net Income $ 90,750 $ 60,750
Marginal Co.
Balance Sheet
As of December 31st 2009 2008
Current Assets
Cash $ 175,000 $ 150,000
Accounts Receivable 112,000 110,000
Inventories 19,500 23,000
Other Current Assets 12,000 9,300
Total Current Assets 318,500 292,300
Property Plant and Equipment, net 76,300 79,000
Intangible Assets 13,200 20,000
Total Assets $ 408,000 $ 391,300
Liabilities
Current Liabilities $ 220,000 $ 212,000
Long Term Liabilities 63,000 60,000
Total Liabilities 283,000 272,000
Stockholder's Equity
Common Stock $2 Par value 100,000 100,000
Retained Earnings 25,000 19,300
Total Stockholder's Equity 125,000 119,300
Total Liabilities and SHE $ 408,000 $ 391,300
Cash dividends paid during the year. $ 22,000
Common stock market price at year end $ 16.00
Calculate the Following:
1. Current Ratio
2. Receivables Turnover Ratio
3. Average Collection Period
4. Debt to Total Assets Ratio
5. Gross Profit Rate
6. Profit Margin Ratio
7. Return on Assets Ratio
8. Asset Turnover Ratio
9. Earnings Per Share
10. Payout Ratio
Explanation / Answer
2009 2008 Current Ratio 1.45 1.38 Receivables Turnover 4.46 4.50 times Average Coll. Period 2.69 2.67 months Debt To total assets 0.69 0.70 Gross Profit Rate 60.00% 55.56% Profit Margin Ratio 18.15% 12.27% Return on Assets 22.24% 15.53% Assets Turnover Ratio 1.23 1.27 times EPS 1.82 1.22 Payout Ratio 24.24% 36.21%