The balance sheet and income statement for the J. P. Robard Mfg. Company are given below....

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Finance

The balance sheet and income statement for the J. P. Robard Mfg.Company are given below. Calculate the following ratios: currentratio, debt ratio, times interest earned, average collectionperiod, inventory turnover, fixed asset turnover, total assetsturnover, gross profit margin, operating profit margin, operatingreturn on assets, return on equity.
DATA
Balance Sheet: (000)
Cash $500
Accounts receivable 2,000
Inventories 1,000
   Current assets $3,500
Net fixed assets 4,500
   Total assets $8,000
Accounts payable $1,100
Accrued expenses 600
Short-term notes payable 300
   Current liabilities $2,000
Long-term debt 2,000
Owners' equity 4,000
   Total liabilities and owners' equity $8,000
Income Statement: (000)
Sales (all credit) $8,000
Cost of goods sold 3,300
   Gross profit $4,700
Operating expenses (includes $500 depreciation) 3,000
   Operating profit $1,700
Interest expense 367
   Earnings before taxes $1,333
Income taxes (40%) 533
   Net income $800
SOLUTION
Calculate the following ratios:
   Current ratio
   Debt ratio
   Times interest earned
   Average collection period
   Inventory turnover
   Fixed asset turnover
   Total assets turnover
   Gross profit margin
   Operating profit margin
   Operating return on assets
   Return on equity

Answer & Explanation Solved by verified expert

3.9 Ratings (501 Votes)

Answer of Part a Current Ratio Current Assets Current Liabilities Current Ratio 3500 2000 Current Ratio 175 Answer of Part b Debt Ratio Debt Total Assets Debt Ratio 2000 See Answer

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The balance sheet and income statement for the J. P. Robard Mfg.Company are given below. Calculate the following ratios: currentratio, debt ratio, times interest earned, average collectionperiod, inventory turnover, fixed asset turnover, total assetsturnover, gross profit margin, operating profit margin, operatingreturn on assets, return on equity.DATABalance Sheet: (000)Cash$500Accounts receivable2,000Inventories1,000 Current assets$3,500Net fixed assets4,500 Total assets$8,000Accounts payable$1,100Accrued expenses600Short-term notes payable300 Current liabilities$2,000Long-term debt2,000Owners' equity4,000 Total liabilities and owners' equity$8,000Income Statement: (000)Sales (all credit)$8,000Cost of goods sold3,300 Gross profit$4,700Operating expenses (includes $500 depreciation)3,000 Operating profit$1,700Interest expense367 Earnings before taxes$1,333Income taxes (40%)533 Net income$800SOLUTIONCalculate the following ratios: Current ratio Debt ratio Times interest earned Average collection period Inventory turnover Fixed asset turnover Total assets turnover Gross profit margin Operating profit margin Operating return on assets Return on equity

The balance sheet and income statement for the J. P. Robard Mfg.Company are given below. Calculate the following ratios: currentratio, debt ratio, times interest earned, average collectionperiod, inventory turnover, fixed asset turnover, total assetsturnover, gross profit margin, operating profit margin, operatingreturn on assets, return on equity.

DATA
Balance Sheet: (000)
Cash	$500
Accounts receivable	2,000
Inventories	1,000
Current assets	$3,500
Net fixed assets	4,500
Total assets	$8,000

Accounts payable	$1,100
Accrued expenses	600
Short-term notes payable	300
Current liabilities	$2,000
Long-term debt	2,000
Owners' equity	4,000
Total liabilities and owners' equity	$8,000

Income Statement: (000)
Sales (all credit)	$8,000
Cost of goods sold	3,300
Gross profit	$4,700
Operating expenses (includes $500 depreciation)	3,000
Operating profit	$1,700
Interest expense	367
Earnings before taxes	$1,333
Income taxes (40%)	533
Net income	$800

SOLUTION
Calculate the following ratios:
Current ratio
Debt ratio
Times interest earned
Average collection period
Inventory turnover
Fixed asset turnover
Total assets turnover
Gross profit margin
Operating profit margin
Operating return on assets
Return on equity