Problem

Current Ratio, Debt Ratio, and Earnings per ShareSelected items from successive annual rep...

Current Ratio, Debt Ratio, and Earnings per Share

Selected items from successive annual reports of Middlebrook, Inc., appear as follows:

 

2015

2014

Total assets (40% of which are current)

$400,000

$325,000

Current liabilities

$ 80,000

$100,000

Bonds payable, 12%

100,000

50,000

Capital stock, $5 par value

100,000

100,000

Retained earnings

120,000

75,000

Total liabilities&stockholders’ equity

$400,000

$325,000

Dividends of $16,000 were declared and paid in 2015. Compute the following:

a. Current ratio for 2015 and 2014.

b. Debt ratio for 2015 and 2014.

c. Earnings per share for 2015.

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