Following is the balance sheet of Walton Company for 2018 HALTON Balance sheet A
ID: 2398865 • Letter: F
Question
Following is the balance sheet of Walton Company for 2018 HALTON Balance sheet Assets Cash Marketable securities Accounts receivable Inventory Property and equipment Accumulated depreciation Total assets s 15,48e ,980 12.988 11,150 165,5ee $280,71e Liabilities and Stockholders Equity Accounts payable Current notes payable 5 8,960 3,528 4,988 21,180 114,408 Bonds payable Common stock Retained earnings Total liabilities and stockholdersequity 5280,71e The average number of common stock shares outstanding during 2018 was 870 shares. Net income for the year was $14.900. Required Compute each of the following (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. 381 17.13per 2 01 74201% a Current ratio b. Earnings per | Quick (aod-test) ratio Return on Return on equity to equity 23720% ratioExplanation / Answer
Solution a:
Current ratio = Current assets / current liabilities
Current assets = Cash + Marketable securities + Accounts receivables + Inventory = $15,400 + $7,980 + $12,980 + $11,150 = $47,510
Current liabilities = Accounts payable + Current notes payable = $8,960 + $3,520 = $12,480
Current ratio = $47,510 / $12,480 = 3.81
Solution b:
Net Income = $14,900
Average outstanding shares = 870
Earning per share (EPS) = Net Income / Average outstanding sahres = $14,900 / 870 = $17.13 per share
Solution c:
Quick ratio = Quick assets / Current liabilities
Quick assets = Current Assets - Inventory = $47,510 - $11,150 = $36,360
Quick ratio = $36,360 / $12,480 = 2.91
Solution d:
Return on investment = Net Income / Total assets
= $14,900 / $200,710 = 7.42%
Solution e:
Return on equity = Net Income / Shareholder's Equity
= $14,900 / ($114,400 + $47,750) = 9.19%
Solution f:
Debt to equity ratio = Total liabilities + Shareholder's Equity
Total liabilties = $8,960 + $3,520 + $4,900 + $21,180 = $38,560
Shareholder's Equity = $114,400 + $47,750 = $162,150
Debt to Equity ratio = $38,560 / $162,150 = 23.78%