Problem 11-7A Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 12% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013.
| |
2014 |
2013 |
| Sales revenue |
24291000 |
24291000 |
| Net income |
6045760 |
6747500 |
| Interest expense |
917500 |
256900 |
| Tax expense |
1808330 |
2024250 |
| Dividends paid on common stock |
1633150 |
1882710 |
| Dividends paid on preferred stock |
550500 |
550500 |
| Total assets (year-end) |
39135500 |
45545625 |
| Average total assets |
28786563 |
32595105 |
| Total liabilities (year-end) |
11010000 |
5505000 |
| Avg. total common stockholders' equity |
17249000 |
25873500 |
(a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, e.g. 12.5% or 12.5.)
(i) Return on assets
(ii) Return on common stockholders' equity
(iii) Payout ratio
(iv) Debt to assets ratio
(v) Times interest earned