Question

Sales $ 1,000,000 Net income $ 45,000 Current Assets $ 50,000 Fixed Assets $ 200,000 Total Assets $ 250,000 Current Liabilities $ 30,000 Long-Term Liabilities $ 100,000 Total Liabilities $ 130,000 Current stock price $ 28 Number of Shares Outstanding40000 Use the above info to determine the ratios. Use two decimals and enter percents as percent

Answer 1

Profit Margin = income / sales

45,000 / 1,000,000 = 4.5%

Return on Assets = income / assets

45,000 / 250,000 = 18%

Assets turnover = sales / assets

1,000,000 / 250,000 = 4

Earning per share: income / shares outstanding

45,000 / 40,000 = 1.125

Price- Earning ratio = market price / EPS

28 / 1.125 = 24,89

Return on Equity = income / equity*

45,000 / 120,000 = 37.5%

Debt to Equity ratio liab / equity

130,000 / 120,000 = 1,08

Step-by-step explanation:

*solving for equity

Assets = laib + equity

250,000 = 130,000 + equity

equity = 120,000