Prepare various ratios.
Following are selected data from the comparative income statement and balance sheet for Deerfield Corporation for the years ended December 31, 20X8 and 20X7:
Selected Data
|
|
20X8
|
20X7
|
|
Net sales (all on credit)
|
$97,600
|
$93,000
|
|
Cost of goods sold
|
53,500
|
52,500
|
|
Gross profit
|
44,700
|
40,500
|
|
Income from operations
|
16,300
|
15,000
|
|
Interest expense
|
3,100
|
3,500
|
|
Net income
|
9,800
|
9,000
|
|
Cash
|
7,700
|
7,500
|
|
Accounts receivable, net
|
10,700
|
12,500
|
|
Inventory
|
20,000
|
26,000
|
|
Prepaid expenses
|
1,000
|
900
|
|
Total current assets
|
39,400
|
46,900
|
|
Total long-term assets
|
50,000
|
67,000
|
|
Total current liabilities
|
32,000
|
44,500
|
|
Total long-term liabilities
|
11,000
|
39,800
|
|
Common stock, no par
|
*10,000
|
10,000
|
|
Retained earnings
|
25,400
|
19,600
|
*NOTE: 2000 shares of common stock have been issued and outstanding since the company started operations.During the entire fiscal year ended December 31, 20X8, the stock was selling for $45 per share.
Calculate the following ratios at December 31, 20X8:
a) acid-test ratio
b) rate of return on total assets
c) times-interest-earned ratio
d) current ratio