|
|
Plunkett Co.
|
|
Herring Co.
|
| Assets |
|
|
|
|
|
|
| Cash |
|
$128,100 |
|
|
$327,700 |
|
| Receivables |
|
222,300 |
|
|
303,600 |
|
| Inventories |
|
575,100 |
|
|
512,400 |
|
| Total current assets |
|
925,500 |
|
|
1,143,700 |
|
| Other assets |
|
496,000 |
|
|
616,300 |
|
| Total assets |
|
$1,421,500 |
|
|
$1,760,000 |
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
| Current liabilities |
|
$307,500 |
|
|
$350,000 |
|
| Long-term liabilities |
|
408,600 |
|
|
496,000 |
|
| Capital stock and retained earnings |
|
705,400 |
|
|
914,000 |
|
| Total liabilities and stockholders' equity |
|
$1,421,500 |
|
|
$1,760,000 |
|
| Annual sales |
|
$936,000 |
|
|
$1,516,200 |
|
| Rate of gross profit on sales |
|
30 |
% |
|
40 |
% |
Each of these companies has requested a loan of $49,970 for 6 months with no collateral offered. In as much as your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Compute the various ratios for each company.
|
|
Plunkett Co.
|
|
Herring Co.
|
| Current ratio |
|
|
: 1 |
|
|
: 1 |
| Acid-test ratio |
|
|
: 1 |
|
|
: 1 |
| Accounts receivable turnover |
|
|
times |
|
|
times |
| Inventory turnover |
|
|
times |
|
|
times |
| Cash to current liabilities |
|
|
: 1 |
|
|
: 1 |