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Question: below are the comparative balance sheets for 2016 and 2017...

Question details

Below are the comparative balance sheets for 2016 and 2017 as well as the income statement for 2017 for Dynamite Sales company.

2017

2016

Income statement

Sales revenue

$845,000

Cost of goods sold

520,000

Gross profit

325,000

Operating expenses

110,000

Pretax income

215,000

Income tax

47,300

Net income

$167,700

Balance sheet

Cash

$7,200

$5,620

Accounts receivable (net)

39,400

36,000

Merchandise inventory

14,000

18,000

Prepaid-expenses

500

400

Fixed assets (net)

210,000

180,000

$271,100

$240,020

Accounts payable

$19,000

$18,000

Income taxes payable

2,000

1,000

Bonds payable

94,000

90,000

Common stock

100,000

100,000

Retained earnings

56,100

31,020

$271,100

$240,020

*Assume the following. Interest expense is $8,000. The market price of stock on December 31, 2015 is $26.00. The income tax rate is 22%. The average number of shares outstanding over 2015 is 10,000 shares.

Using this information, calculate and show work for each of the following ratios (show as decimals to four places – do not show as percentages):

Profit margin

Return on assets

Return on equity

Earnings per share

Price/earnings ratio

Current ratio

Quick ratio

Acid test ratio

Debt-to-equity ratio

Accounts receivable turnover

A/R days until received

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