Please answer questions 1-12 with formulas and step by step. I did them myself b
ID: 2510091 • Letter: P
Question
Please answer questions 1-12 with formulas and step by step.
I did them myself but am not sure if I’m correct. Ignore pencil markings.
Thank you so much I’m advance Scully Corporation Income Statement Year ended Dec 31, 2016 (all numbers in 000's) Nehod r -5bck L.td? Sales Less: Cost of goods sold Gross profit Less: Expenses Net income S100,000 60.000 $ 40,000 $25,000 W cO S15,000 thush Additionul information FIRST A co equ Credil terms granted to customers are 90 days Average industry holding period for inventory is 60 days. The market price per share at the end of 2016 was $20 Industry average price earnings ratio for simiiar companies is 7 Average payout ratio is aboul 40 percent for similar companies Required a. What is the networth of the Scully Corporation? b. Compute the following ratios for 2016. 1. Current ratio 2 2. Acid test ratioD 3. Receivables turnover and collection period 4. Inventory turnover and holding period 4.4 a. Profit margin 1S 6. Asset turnover iteertakg 7. Return on assets 13:57 8. Return on common stockholder's equity 167 9. Debt to assets ratio Pr 10. Eamings per share 12. Payout ratio 11. Price earnings ratio
Explanation / Answer
1. Current Ratio= current assets/current liabilities= $35500/$12370=2.87
2. Acit test ratio={Cash + account receivables}/current liabilities=$25500/$12370=2.06
3. Receivables turnover and collection period=average account receivables*365/total credit sales=$22300*365/100000=81.4 days
{Average account receivables=($21200+$23400)/2=$22300
4.Inventory turnover and holding period=average stock*365/ cost of sales= $8500*365/$60000=51.71 days
{Average stock=($10000+$7000)/2=$8500}
5. Profit margin=net income/net sales*100=$15000*100/$100000=15%
6. Assets turnover ratio= sales/ average total assets= $100000/$115300=0.87
Average total assets=($110500+$120100)/2=$115300
7. Return on assets= net income*100/total assets=15000*100/110500=13.57%
8. Return on stockholders equity=net income/shareholders equity=$15000*100/$98130=15.29%
9.Debt to assets ratio= total debts/total assets=$12370/$110500=11.19%
10. Earning per share= net income/no of shares=$15000/7500=$2 per share
11. Price to earning ratio=Market price/EarNing per share=$20/$2=10 times
12. Payout ratio=Dividend per share/Earning per share
Dividend of the given co.is not mentioned so payout ratio has not been calculated.
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