Question

Compute the following ratios. Please help!!

MIESZUOUASUTUSU Problem 2 Carriage Corporation Income Statement For the year ended 2018 and 2019 (in dollars) Sales year 2019 Sales year 2018 Cost of Goods Sold Gross Profit Cost of Goods Sold 448,600 297,250 151,350 98,600 4,100 48,650 510,200 300,000 210,200 120,000 Gross Profit Operating Expenses Operating Expense Interest Expense Interest Expense 5,900 Income before taxes Income before taxes 84,300 Income Taxes 19,598 Income Taxes 24,900 59,400 Net Income 29,052 Net Income Carriage Corporation Balance Sheet December 31, 2019 (in dollars) Assets Liabilities 10,000 8.400 Accounts Payable 17,500 3,200 29,200 Cash Short-term investments Notes Receivable Inventory Accrued Wages Payable Income Tax Payable 4,500 3,300 32,150 Other Liabilities repaid Expenses 2,650 Total Liabilities 63,400 87,400 90,000 Common Stock (20,000 shares outstanding) Retained Earnings juipment, net 153,300 62,800 tal Assets 240,200 Total Liabilities and Equity 240,200 npute the following ratios and put only your answer on the answer sheet: Profit Margin Ratio, Earnings per share, Debt quity Ratio, Acid test ratio, Inventory turnover, Current Ratio. Inventory had a balance of $30,500 at the end of 2018,

Answer 1

CURRENT RATIO = Current Assets/ Current Liabilities

= 76,900 / 24,000 = 3.204 : 1

Current Assets = Cash + Short Investments + Notes Receivable + Inventory + Prepaid Expenses

Current Liabilities = Accounts Payable + Accrued Wages + Income Tax Payable
wore (profil) you Profit Maugin Ratio = Net Net Income (protil) sales 2018 2019 29052 448,600 59.400 . 510,200 11-64.12 216047.-) anning per shame = Net Income. No. of shares outstanding 2018 29,052 20.000 shares 2019 59 400 20,000 shans = 1.4526 - 9.97 - Debt Equity Ratio = debt (long term) Equity 63.4060 190,000 + 62,500) - 10.41 1 Equity & Shave capital (common stock tlet Earning

E Acid Test Ratio liquidity Ratio = Liquéd Assets wewent Liabilities Liquid Assets = Current Assets - Inventory - - Prepaid expenses = 8,400+ 99200 + 4500 -32,150-2650 = 7300 Werent liabilities = Accounts payable & accred wages I t Income Tax payable - 17500 + 3200 + 3300 - 2400 1. Acid Test Ratio = L 7300 24000 0-304:1 - → Inventory Turnover Ratio = Cost of sales - Average stock I for the year 2017 - Average stock = (opening tcloxing Inventory 30500 + 32,150 2 31,325) Therefore Inventory Patio = 300,000 /9.57 times 31325

Profit Margin Ratio and Earning per share has been calculated for both years as sufficient information was given.