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	6. Ratio computation. The financial statements of the Lone Pine Company follow.
	LONE PINE COMPANY
	Comparative Balance Sheets
	December 31, 20X2 and 20X1 ($000 Omitted)
	20X2				20X1
	Assets
	Current Assets
	Cash and Short-Term Investments	$400				$600
	Accounts Receivable (net)	3,000				2,400
	Inventories	3,000				2,300
	Total Current Assets	$6,400				$5,300
	Property, Plant, and Equipment
	Land	$1,700				$500
	Buildings and Equipment (net)	1,500				1,000
	Total Property, Plant, and Equipment	$3,200				$1,500
	Total Assets	$9,600				$6,800
	Liabilities and Stockholders Equity
	Current Liabilities
	Accounts Payable	$2,800				$1,700
	Notes Payable	1,100				1,900
	Total Current Liabilities	$3,900				$3,600
	Long-Term Liabilities
	Bonds Payable	4,100				2,100
	Total Liabilities	$8,000				$5,700
	Stockholders Equity
	Common Stock			$200		$200
	Retained Earnings			1,400		900
	Total Stockholders Equity			$1,600		$1,100
Total Liabilities and Stockholders Equity				$9,600		$6,800
	LONE PINE COMPANY
	Statement of Income and Retained Earnings
	For the Year Ending December 31,20X2 ($000 Omitted)
	Net Sales*				$36,000
	Less: Cost of Goods Sold		$20,000
	Selling Expense		6,000
	Administrative Expense		4,000
	Interest Expense		400
	Income Tax Expense		2,000		32,400
	Net Income				$3,600
	Retained Earnings, Jan. 1				900
	Ending Retained Earnings				$4,500
	Cash Dividends Declared and Paid				3,100
	Retained Earnings, Dec. 31				$1,400
	*All sales are on account.

Instructions

Compute the following items for Lone Pine Company for 20X2, rounding all calculations to two decimal places when necessary:

a. Quick ratio

b. Current ratio

c. Inventory-turnover ratio

d. Accounts-receivable-turnover ratio

e. Return-on-assets ratio

f. Net-profit-margin ratio

g. Return-on-common-stockholders equity

h. Debt-to-total assets

i. Number of times that interest is earned

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