Question

1.value: 5.00 points Presented here are the comparative balance sheets of Hames, Inc., at December 31, 2017 and 2016. Sales for the year ended December 31, 2017, totaled $670,000. HAMES, INC., Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash $ 20,000 $ 21,000 Accounts receivable 78,000 72,000 Merchandise inventory 103,000 99,000 Total current assets $ 201,000 $ 192,000 Land 50,000 40,000 Plant and equipment 125,000 110,000 Less: Accumulated depreciation (65,000 ) (60,000 ) Total assets $ 311,000 $ 282,000 Liabilities Short-term debt $ 18,000 $ 17,000 Accounts payable 64,400 76,000 Other accrued liabilities 20,000 18,000 Total current liabilities $ 102,400 $ 111,000 Long-term debt 22,000 30,000 Total liabilities $ 124,400 $ 141,000 Stockholders’ Equity Common stock, no par, 100,000 shares authorized 40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000 Retained earnings: Beginning balance $ 82,000 $ 85,000 Net income for the year 50,600 2,000 Dividends for the year (20,000 ) (5,000 ) Ending balance $ 112,600 $ 82,000 Total stockholders’ equity $ 186,600 $ 141,000 Total liabilities and stockholders’ equity $ 311,000 $ 282,000

Required:

a. Calculate ROI for 2017. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b. Calculate ROE for 2017. (Round your answer to 1 decimal place.)

c. Calculate working capital at December 31, 2017.

d. Calculate the current ratio at December 31, 2017. (Round your answer to 2 decimal places.)

e. Calculate the acid-test ratio at December 31, 2017. (Round your answer to 2 decimal places.)

Answer 1

1	Calculate ROI for 2017
	Net Income / Average Total Assets
	50600 / (311000+282000)/2
	17.07	%
2	Calculate ROE for 2017
	Net Income / Average Stockholder's Equity
	50600 / (186600+141000)/2
	50600 / 163800*100
	30.89	%
3	Calculate working capital at December 31, 2017
	Current Assets - Current Liabilities
	201000 - 102400
	98600
4	Calculate the current ratio at December 31, 2017
	Current Assets / Current Liabilities
	201000 / 102400
	1.96
5	Calculate the acid-test ratio at December 31, 2017
	Current Assets - Inventory / Current Liabilities
	201000 - 103000 / 102400
	0.96