Question

prepaid expenses = $50,000

Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of Sales: $300,000 Interest expenses: $150,000 Net Profit after taxes: $100,000 Accrued Expenses: $20,000

Answer 1

1	Quick Ratio:
	(Cash+Accounts Receivable)/(Accounts Payable+Accured Expense)
	(50000+70000)/(100000+20000)
	1.00
2	AR Turnover Ratio:
	Sales/Accounts Receivable
	750000/70000
	10.71
3	Net Return after Tax/(Land & Building+Cash+Inventory+Prepaid Expesne+AR)
	100000/(500000+50000+150000+50000+70000)
	12.2%
4	(Accounts Payable+Long Term Debt+Accured Expense)/(Land & Building+Cash+Inventory+Prepaid Expesne+AR)
	(100000+200000+20000)/((500000+50000+150000+50000+70000))
	0.39
5	Time Earned Ratio
	EBITDA/Interest Expense
	(Net profit after tax+Tax+Interest Expense)/(Interest Expense)
	(100000+200000+150000)/(150000)
	3.00
6	Net Return after Tax/Sales
	100000/750000
	13.33%
7	Net Return after Tax/(Common Stock+Retained Earning)
	100000/(100000+400000)
	20.0%