P14-6 The comparative statements of Beulah Company Limited are presented below.
BEULAH COMPANY LIMITED Income Statement
For the Years Ended December 31
Problems 755
10 Debt to assets ratio.
11 Times interest earned
BEULAH COMPANY LIMITED Income Statement
Net sales (all on account) 2017 2016
Expenses 500,000 420,000
Cost of goods sold 315,000 254,000
Selling and administrative 120,800 114,800
Interest expense 7,500 6,500
Income tax expense 20,000 15,000
Total expenses 463,300 390,300
Net income 36,700 29,700
BEULAH COMPANY LIMITED Statements of Financial Position
December 31
Assets
Plant assets (net) 2017 2016
Current assets 423,000 383,000
Inventory
Accounts receivable (net) 80,000 60,000
Short-term investments 85,000 75,000
Cash 15,000 21,000
Total current assets 204,000 168,000
Total assets 627,000 551,000
Equity and Liabilities
Equity
Share capital ordinary 150,000 150,000
Retained earnings 223,000 200,000
Total equity 373,000 350,000
Non-current liabilities
Bonds payable 120,000 80,000
Current liabilities 122,000 110,000
Accounts payable 12,000 11,000
Income taxes payable 134,000 121,000
Total current liabilities 254,000 201,000
Total liabilities 627,000 551,000
Total equity and liabilities
Minimal data
Compute the following ratios (LO5):
1. Current ratio.
2. Acid-test ratio.
3. Profit margin.
4. Asset turnover.
5. Return on assets.
6. Return on ordinary shareholders' equity.
7. Earnings per share.
8. Price-earnings ratio.
9. Payout ratio.
10. Debt to assets ratio.
11. Times interest earned.
