Westwood Corporation: Compute Ratios
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42. From the following information, compute the ratios indicated and place the proper numbers in the spaces provided. Assume the average for the year is the same as the ending balances for the balance sheet accounts. Round percentages to one decimal place, and show your work.
Westwood Corporation
Balance Sheet
December 31, 20xx
Assets
Cash $ 15,000
Marketable securities 10,000
Accounts receivable (net) 20,000
Inventory 30,000
Prepaid expenses 8,000
Property, plant, and equipment 117,000
Total assets $200,000
Liabilities and Stockholders' Equity
Current liabilities $ 30,000
Long-term liabilities 50,000
Stockholders' equity 120,000
Total liabilities and stockholders' equity $200,000
Westwood Corporation
Income Statement
For the Year Ended December 31, 20xx
Net sales $160,000
Cost of goods sold 120,000
Gross margin $ 40,000
Operating expenses
Selling and administrative expenses $ 16,000
Interest expense 8,000
Income taxes expense 4,000 28,000
Net income $ 12,000
Westwood had 4,000 shares of common stock issued and outstanding. The market price of common stock at year end was $15.00 per share. Dividends paid in 20xx were $0.60 per share.
Current ratio Asset turnover
Quick ratio Return on assets
Receivable turnover Return on equity
Days' sales uncollected Debt to equity ratio
Inventory turnover Interest coverage ratio
Profit margin Days' inventory on hand
Dividends yield Price/earnings (P/E) ratio
Ans: Current ratio
Asset turnover
Quick ratio
Return on assets
Receivable turnover
Return on equity
Days' sales uncollected
Debt to equity ratio
Inventory turnover
Interest coverage ratio
Profit margin
Days' inventory on hand
Dividends yield
Price/earnings (P/E) ratio
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Solution Summary
The expert computes ratios for Westwood Corporations.
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