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Markus Companys common stock sold for $3.50 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this years financial statements Ending Beginning Balance Balance $ 35,000 $ 34,000 $ 70,000 55,000 $60,700 $ 70,000 $ 165,700 159,000 557000 $586,800 $ 67,500 $ 55,500 152,000 $ 136,800 $ 133,000 $ 133,000 $405,000 $450,000 Total liabilities and stockholders equity $ 557,000 $586,800 Cash Accounts receivable Inventory Current assets lotal assets Current liabilities Total liabilities Common stock, $1 par value Total stockholders equity This Year Sales (all on account) 825,000 478,500 346,500 Net operating income $ 194,250 $ 10,500 $ 128,625 Cost of goods sold Gross margin Interest expense Net income0. What is the inventory turnover and the average sale period? (Use 365 days in a year. Round your intermediate and final answers to 2 decimal places.) Inventory turnover Average sale period days11. What is the companys operating cycle? (Round your intermediate and final answers to 2 decimal places.) Operating cycle days12. What is the total asset turnover? (Round your answer to 2 decimal places.) Total asset turnover13. What is the times interest earned ratio? (Round your answer to 2 decimal place.) Times interest earned ratio14. What is the debt-to-equity ratio at the end of this year? (Round your answer to 2 decimal places.) Debt-to-equity ratio15. What is the equity multiplier? (Round your answer to 2 decimal places.) Equity multiplier

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Solution:- Ratio Analysis of Makus Company 1). a. Inventory turnover ratio - Cost of goods sold/ Average Inventory - 4,78,50o/65350 7.32 Times Average Inventory - (Opening Inventory + Closing Inventory)/2 - (60,700+70,000)/:2 b. Average sale period - Days in the year/ Inventory Turnover ratio - 365/4,78,500*65350 49.85 Days 2). Operating Cycle - Accounts receivable per iod +Average sale period 27.65 7.32 34-97 Days Accounts Receivable Period - 365/credit sales Average Receivables - 365/8,25,000*62,500 27.65 Days Aveage Debtor - (Opening Receivables Closing Receivables)/2 - (55,o00+70,000)/:2 Note:- In absence of information all sales have been considered as credit sales3). Total Assets turnover ratio -Total sales/ Average Total Assets - 8,25,ooo/ Average Total Assets - 8,25,000/ 5.71,900 1.44 Times Average Total Assets - (Opening Assets Closing Total Assets)/2 (5,86,800+5.57,000)/2 571900 4). Times Interest Earned ratio - Net Operating Income/ Interest Expenses 1,94,250/10,500 18.5 Times 5). Debt to Equity Ratio - Long term Liabilitiers / Equity - (Total Liabilities- Current Liabilities)/ Equity - (1,52,0oo-67,500)/4,05,00o - (1,52,0oo-67,500)/4,05,00o 0.21 Times OR - Total Liabilities/ Equity 1,52,000/4,05,000 o.38 Times 6) Equity Multiplier - Total Assets/ Shareholders Value -5.57,o0o/4,05,ooo 1.38 Times

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