90.2K

Verified Solution

Link Copied!

Jordan Corporation

Balance Sheets

December 31, 2016 and 2015

Assets Current Assets: Cash $ 250,000 $ 275,000 Accounts Receivable 400,000 450,000 Inventory 600,000 500,000 Prepaid Expenses 25,000 30,000 Total Current Assets 1,275,000 1,255,000 Property, Plant and Equipment: Equipment 1,000,000 900,000 Less Accumulated Depreciation (200,000) (175,000) Total Property, Plant and Equipment 800,000 725,000 Total Assets $ 2,075,000 $ 1,980,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable $ 430,000 $ 400,000 Notes Payable 100,000 80,000 Wages Payable 30,000 20,000 Total Current Liabilities 560,000 500,000 Long Term Liabilities: Notes Payable 200,000 180,000 Bonds Payable 150,000 200,000 Total Long Term Liabilities 350,000 380,000 Total Liabilities 910,000 880,000 Stockholders' Equity Common Stock 500,000 500,000 Additional Paid in Capital 100,000 100,000 Retained Earnings 565,000 500,000 Total Stockholders' Equity 1,165,000 1,100,000 Total Liabilities and Equity $ 2,075,000 $ 1,980,000

Jordan Corporation

Income Statement

Years Ended December 31, 2016 and 2015

Sales $ 3,500,000 $ 3,300,000 Cost of Goods Sold 1,200,000 1,150,000 Gross Profit 2,300,000 2,150,000 Operating Expenses 1,800,000 1,700,000 Operating Income 500,000 450,000 Interest Expense 25,000 30,000 Income Before Taxes 475,000 420,000 Income Taxes 100,000 80,000 Net Income $ 375,000 $ 340,000

There are 100,000 shares outstanding at the end of both 2016 and 2015.

Market price per share on December 31, 2016 was $45.00 per share.

Company paid $100,000 in dividends during 2016.

Compute the following ratios:

Liquidity:

1. Working capital

2. Current ratio

3. Inventory turnover

4. Days in inventory

5. Accounts receivable turnover

6. Average collection period

Solvency:

1. Debt to assets ratio

2. Times interest earned

Profitability:

1.Earnings per share

2. Price earnings ratio

3. Gross profit ratio

4. Net profit margin ratio

5. Return on assets

6. Asset turnover

7. Dividend payout ratio

8. Return on common equity

Answer & Explanation Solved by verified expert

See Answer