Problem

Selected year-end financial statements of Overland Corporation follow. (All sales were on...

Selected year-end financial statements of Overland Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2010, were inventory, $16,400; total assets, $95,900; common stock, $41,500; and retained earnings, $19,800.)

OVERLAND CORPORATION

Income Statement

For Year Ended December 31, 2011

Sales…

$215,500

Cost of goods sold…

136,100

Gross profit…

79,400

Operating expenses…

50,200

Interest expense…

1,200

Income before taxes…

28,000

Income taxes…

2,200

Net income…

$ 25,800

 

OVERLAND CORPORATION

Balance Sheet

December 31, 2011

Assets

Liabilities and Equity

Cash…

$ 5,100

Accounts payable…

$10,500

Short-term investments…

5,900

Accrued wages payable…

2,300

Accounts receivable, net  …

11,100

Income taxes payable…

1,600

Notes receivable (trade)*  …

2,000

Long-term note payable, secured by mortgage on plant assets …

25,000

MprrhanHisp inventory…

12,500

Prepaid expenses…

1,000

Common stock, $5 par value  …

41,000

Plant assets net…

72,900

Retained earnings…

30,100

Total assets...

$110,500

Total liabilities and equity…

$110,500

* These are short-term notes receivable arising from customer (trade) sales.

Required

Compute the following: (1) current ratio, (2) acid-test ratio, (3) days’ sales uncollected, (4) inventory turnover, (5) days’ sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders’ equity.

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