Dillon Company: Compute 13 separate ratios
See attached file also.
P18-6A
The comparative statements of Dillon Company are presented below.
DILLON COMPANY
Income Statement
For the Year Ended December 31
2009 2008
Net sales (all on account)
$600,000
$520,000
Expenses
Cost of goods sold 415,000 354,000
Selling and administrative 120,800 114,800
Interest expense 7,800 6,000
Income tax expense
18,000
14,000
Total expenses
561,600
488,800
Net income
$ 38,400
$ 31,200
DILLON COMPANY
Balance Sheets
December 31
Assets 2009 2008
Current assets
Cash $ 21,000 $ 18,000
Short-term investments 18,000 15,000
Accounts receivable (net) 86,000 74,000
Inventory
90,000
70,000
Total current assets
215,000
177,000
Plant assets (net)
423,000
383,000
Total assets
$638,000
$560,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $122,000 $110,000
Income taxes payable
23,000
20,000
Total current liabilities
145,000
130,000
Long-term liabilities
Bonds payable
120,000
80,000
Total liabilities
265,000
210,000
Stockholders’ equity
Common stock ($5 par) 150,000 150,000
Retained earnings
223,000
200,000
Total stockholders’ equity
373,000
350,000
Total liabilities and stockholders’ equity
$638,000
$560,000
Additional data:
The common stock recently sold at $19.50 per share.
The year-end balance in the allowance for doubtful accounts was $3,000 for 2009 and $2,400 for 2008.
Instructions
Compute the following ratios for 2009. (Round acid-test ratio and earnings per share to 2 decimal places and all other answers to 1 decimal place.)
(a) Current :1
(b) Acid-test :1
(c) Receivables turnover times
(d) Inventory turnover times
(e) Profit margin %
(f) Asset turnover times
(g) Return on assets %
(h) Return on common stockholders’ equity %
(i) Earnings per share $
(j) Price-earnings times
(k) Payout %
(l) Debt to total assets %
(m) Times interest earned times
