The following financial statements for Jordan Corporation should be used to calculate the following ratios.
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Jordan Corporation
Balance Sheets
December 31, 2016 and 2015
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Assets
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Current Assets:
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Cash
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mce_markernbsp; 250,000
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mce_markernbsp; 275,000
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Accounts Receivable
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400,000
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450,000
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Inventory
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600,000
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500,000
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Prepaid Expenses
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25,000
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30,000
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Total Current Assets
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1,275,000
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1,255,000
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Property, Plant and Equipment:
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Equipment
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1,000,000
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900,000
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Less Accumulated Depreciation
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(200,000)
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(175,000)
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Total Property, Plant and Equipment
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800,000
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725,000
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Total Assets
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mce_markernbsp; 2,075,000
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mce_markernbsp; 1,980,000
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Liabilities and Stockholders' Equity
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Current Liabilities:
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Accounts Payable
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mce_markernbsp; 430,000
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mce_markernbsp; 400,000
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Notes Payable
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100,000
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80,000
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Wages Payable
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30,000
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20,000
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Total Current Liabilities
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560,000
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500,000
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Long Term Liabilities:
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Notes Payable
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200,000
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180,000
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Bonds Payable
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150,000
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200,000
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Total Long Term Liabilities
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350,000
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380,000
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Total Liabilities
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910,000
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880,000
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Stockholders' Equity
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Common Stock
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500,000
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500,000
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Additional Paid in Capital
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100,000
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100,000
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Retained Earnings
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565,000
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500,000
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Total Stockholders' Equity
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1,165,000
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1,100,000
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Total Liabilities and Equity
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mce_markernbsp; 2,075,000
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mce_markernbsp; 1,980,000
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Jordan Corporation
Income Statement
Years Ended December 31, 2016 and 2015
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Sales
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mce_markernbsp; 3,500,000
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mce_markernbsp; 3,300,000
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Cost of Goods Sold
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1,200,000
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1,150,000
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Gross Profit
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2,300,000
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2,150,000
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Operating Expenses
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1,800,000
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1,700,000
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Operating Income
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500,000
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450,000
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Interest Expense
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25,000
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30,000
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Income Before Taxes
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475,000
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420,000
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Income Taxes
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100,000
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80,000
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Net Income
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mce_markernbsp; 375,000
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mce_markernbsp; 340,000
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There are 100,000 shares outstanding at the end of both 2016 and 2015.
Market price per share on December 31, 2016 was $45.00 per share.
Company paid $100,000 in dividends during 2016.
Compute the following ratios:
Liquidity:
- Working capital
- Current ratio
- Inventory turnover
- Days in inventory
- Accounts receivable turnover
- Average collection period
Solvency:
- Debt to assets ratio
- Times interest earned
Profitability:
- Earnings per share
- Price earnings ratio
- Gross profit ratio
- Net profit margin ratio
- Return on assets
- Asset turnover
- Dividend payout ratio
- Return on common equity