Question
Condensed balance sheet and income statement data for Jergan Corporation are presented here. Jergan Corporation Balance...
Condensed balance sheet and income statement data for Jergan Corporation are presented here.
Jergan Corporation | |||||||||
2020 | 2019 | 2018 | |||||||
Cash | $ 30,100 | $ 17,500 | $ 18,100 | ||||||
Accounts receivable (net) | 49,000 | 45,400 | 47,100 | ||||||
Other current assets | 89,500 | 95,400 | 64,400 | ||||||
Investments | 54,400 | 70,300 | 45,700 | ||||||
Plant and equipment (net) | 499,200 | 370,100 | 357,100 | ||||||
$722,200 | $598,700 | $532,400 | |||||||
Current liabilities | $84,400 | $80,300 | $69,100 | ||||||
Long-term debt | 144,500 | 86,000 | 50,100 | ||||||
Common stock, $10 par | 321,000 | 317,000 | 297,000 | ||||||
Retained earnings | 172,300 | 115,400 | 116,200 | ||||||
$722,200 | $598,700 | $532,400 |
Jergan Corporation | ||||||
2020 | 2019 | |||||
Sales revenue | $737,500 | $607,000 | ||||
Less: Sales returns and allowances | 40,500 | 30,600 | ||||
Net sales | 697,000 | 576,400 | ||||
Cost of goods sold | 426,400 | 371,000 | ||||
Gross profit | 270,600 | 205,400 | ||||
Operating expenses (including income taxes) | 186,960 | 153,524 | ||||
Net income | $ 83,640 | $ 51,876 |
Additional information:
1. | The market price of Jergan’s common stock was $7.00, $7.50, and $8.50 for 2018, 2019, and 2020, respectively. | |
2. | You must compute dividends paid. All dividends were paid in cash. |
(a)
Compute the following ratios for 2019 and 2020. (Round Asset turnover and Earnings per share to 2 decimal places, e.g. 1.65. Round payout ratio and debt to assets ratio to 0 decimal places, e.g. 18%. Round all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
2019 | 2020 | |||||||
(1) | Profit margin | % | % | |||||
(2) | Gross profit rate | % | % | |||||
(3) | Asset turnover | times | times | |||||
(4) | Earnings per share | $ | $ | |||||
(5) | Price-earnings ratio | times | times | |||||
(6) | Payout ratio | % | % | |||||
(7) | Debt to assets ratio | % | % |
Answers
2019 Working-2019 2020 Working-2020 1 Profit margin 8.5% =51876/607000 11.3% =83640/737500 2 Gross profit rate 33.8% =205400/607000 36.7% =270600/737500 3 Asset turnover 1.07 =607000/((598700+532400)/2) 1.70 =737500/((499200+370100)/2) 4 Earnings per share 1.64 =51876/(317000/10) 2.61 =83640/(321000/10) 5 Price-earnings ratio 4.6 =7.5/1.64 3.3 =8.5/2.61 6 Payout ratio 101% =((116200+51786-115400)/(317000/10))/1.64 32% =((115400+83640-172300)/(321000/10))/2.61 7 Debt to assets ratio 28% =(80300+86000)/598700 32% =(84400+144500)/722200
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