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Q1) Condensed financial statements of Westward Corporation for 2006 are given below.

Westward Corporation Westward Corporation 
Balance Sheet Income Statement 
31-Dec-06 For the Year Ended December 31, 2006

 

Assets    Revenues  2,000,000
Current assets    Expenses   
Cash and temporary    Cost of goods sold  1,080,000
investments 30,000 Selling and administrative   
Accounts receivable  70,000 expenses 495,000
Inventories  120,000 Interest expense  30,000
Total current assets  220,000 Total expenses  1,605,000
    Income before income taxes  395,000
equipment (net)  780,000 Income tax expense  140,000
Total assets  1,000,000 Net income  255,000
Liabilities and Stockholders' Equity     
Current liabilities  80000  
Long-term liabilities  300000  
Common stockholders' equity  620000  
  Total liabilities and   
  stockholders' equity  1000000

Extra data as of December 31, 2005: Inventory = $100,000; Total assets = $900,000; Common stockholders' equity = $540,000.

problems:

find out the following listed ratios for 2006 illustrating supporting calculations.

(a) Current ratio
(b) Debt to total assets
(c) Times interest earned
(d) Inventory turnover
(e) Profit margin ratio
(f) Return on common stockholders' equity
(g) Return on assets

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M921992

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