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.
Questions:
Calculate 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