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20. Brigman Inc. has the following financial statement information for 2009 and 2008:
| Balance Sheet Information: | 2009 | | 2008 |
| Assets: | | | |
| Cash | $ 5,000 | | $ 12,000 |
| Accounts receivable | 14,000 | | 10,000 |
| Inventory | 35,000 | | 30,000 |
| Total current assets | $ 54,000 | | $ 52,000 |
| | | | |
| Property and Equipment (net) | 50,000 | | 45,000 |
| Total assets | $104,000 | | $ 97,000 |
| | | | |
| Liabilities: | | | |
| Accounts payable | $ 9,000 | | $ 3,000 |
| Salaries payable | 3,000 | | 1,000 |
| Total current liabilities | $ 12,000 | | $ 4,000 |
| Notes payable | 20,000 | | 25,000 |
| Total liabilities | $ 32,000 | | $ 29,000 |
| | | | |
| Stockholders' Equity: | | | |
| Common stock | $ 40,000 | | $ 40,000 |
| Retained earnings | 32,000 | | 28,000 |
| Total stockholders' equity | $ 72,000 | | $ 68,000 |
| Total liabilities and stockholders' equity | $104,000 | | $ 97,000 |
| | | | |
| Income Statement Information: | | | |
| Net sales | $650,000 | | $556,000 |
| Cost of goods sold | 380,000 | | 290,000 |
| Gross profit | $270,000 | | $266,000 |
| Selling and administrative expenses | 75,000 | | 70,000 |
| Interest expense | 4,000 | | 10,000 |
| Income before income taxes | $191,000 | | $186,000 |
| Income tax expense | 57,300 | | 56,300 |
| Net income | $133,700 | | $129,700 |
| | | | |
| Other Information: | | | |
| Number of common shares outstanding | 4,000 | | 4,000 |
| Dividends paid | $ 0 | | $ 0 |
| Market price per share (12/31) | $40 | | $30 |
| Income tax rate | 30% | | 30.27% |
Required: Compute the following ratios for the year ending December 31, 2009: (round to two decimal places)
| A. | Inventory turnover |
| | |
| B. | Return on assets (ROA) ratio |
| | |
| C. | Asset turnover ratio |
| | |
| D. | Earnings per share (EPS) |
| | |
| E. | Price earnings (P/E) ratio. |
F. Return on common stockholders equity
G. Current ratio
H. Quick ratio
I. Debt-to-equity ratio
Answer & Explanation
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