Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 210 $ 310 Accounts receivable, net 340 360 Inventory 310 280 Prepaid expenses 20 20 Total current assets 880 970 Plant and equipment, net 1,120 1,220 Total assets $ 2,000 $ 2,190 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 280 $ 310 Accrued liabilities 50 50 Notes payable, short term 40 40 Total current liabilities 370 400 Bonds payable 270 440 Total liabilities 640 840 Stockholders’ equity: Common stock, $2 par value 200 200 Additional paid-in capital 330 330 Retained earnings 830 820 Total stockholders’ equity 1,360 1,350 Total liabilities & stockholders’ equity $ 2,000 $ 2,190 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $ 1,490 Cost of goods sold 940 Gross margin 550 Selling and administrative expense 455 Net operating income 95 Interest expense 20 Net income before taxes 75 Income taxes (30%) 23 Net income $ 52 Dividends on common stock during Year 2 totaled $42 thousand. The market price of common stock at the end of Year 2 was $11.20 per share. Required: Compute the following for Year 2: a. Gross margin percentage. (Round your answer to 1 decimal place.) b. Earnings per share. (Round your answer to 2 decimal places.) c. Price-earnings ratio. (Do not round intermediate calculations. Round your answer to 1 decimal place.) d. Dividend payout ratio. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place.) e. Dividend yield ratio. (Round your "Percentage" answer to 2 decimal places.) f. Return on total assets. (Do not round intermediate calculations. Round your "Percentage" answer to 2 decimal places.) g. Return on equity. (Round your "Percentage" answer to 2 decimal places.) h. Book value per share. (Round your answer to 2 decimal places.) i. Working capital. (Input your answer in thousands of dollars.) j. Current ratio. (Round your answer to 2 decimal places.) k. Acid-test (quick) ratio. (Round your answer to 2 decimal places.) l. Accounts receivable turnover. (Round your answer to 2 decimal places.) m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) n. Inventory turnover. (Round your answer to 2 decimal places.) o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) p. Times interest earned ratio. (Round your answer to 2 decimal places.) q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

Hyrkas Corporation's most recent balance sheet and income statement appear below: Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 210 $ 310 Accounts receivable, net 340 360 Inventory 310 280 Prepaid expenses 20 20 Total current assets 880 970 Plant and equipment, net 1,120 1,220 Total assets $ 2,000 $ 2,190 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 280 $ 310 Accrued liabilities 50 50 Notes payable, short term 40 40 Total current liabilities 370 400 Bonds payable 270 440 Total liabilities 640 840 Stockholders’ equity: Common stock, $2 par value 200 200 Additional paid-in capital 330 330 Retained earnings 830 820 Total stockholders’ equity 1,360 1,350 Total liabilities & stockholders’ equity $ 2,000 $ 2,190 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $ 1,490 Cost of goods sold 940 Gross margin 550 Selling and administrative expense 455 Net operating income 95 Interest expense 20 Net income before taxes 75 Income taxes (30%) 23 Net income $ 52 Dividends on common stock during Year 2 totaled $42 thousand. The market price of common stock at the end of Year 2 was $11.20 per share. Required: Compute the following for Year 2: a. Gross margin percentage. (Round your answer to 1 decimal place.) b. Earnings per share. (Round your answer to 2 decimal places.) c. Price-earnings ratio. (Do not round intermediate calculations. Round your answer to 1 decimal place.) d. Dividend payout ratio. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place.) e. Dividend yield ratio. (Round your "Percentage" answer to 2 decimal places.) f. Return on total assets. (Do not round intermediate calculations. Round your "Percentage" answer to 2 decimal places.) g. Return on equity. (Round your "Percentage" answer to 2 decimal places.) h. Book value per share. (Round your answer to 2 decimal places.) i. Working capital. (Input your answer in thousands of dollars.) j. Current ratio. (Round your answer to 2 decimal places.) k. Acid-test (quick) ratio. (Round your answer to 2 decimal places.) l. Accounts receivable turnover. (Round your answer to 2 decimal places.) m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) n. Inventory turnover. (Round your answer to 2 decimal places.) o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) p. Times interest earned ratio. (Round your answer to 2 decimal places.) q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Hyrkas Corporation's most recent balance sheet and income statement appear below:

	Year 2	Year 1
Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
Assets
Current assets:
Cash	$ 210	$ 310
Accounts receivable, net	340	360
Inventory	310	280
Prepaid expenses	20	20
Total current assets	880	970
Plant and equipment, net	1,120	1,220
Total assets	$ 2,000	$ 2,190
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 280	$ 310
Accrued liabilities	50	50
Notes payable, short term	40	40
Total current liabilities	370	400
Bonds payable	270	440
Total liabilities	640	840
Stockholders’ equity:
Common stock, $2 par value	200	200
Additional paid-in capital	330	330
Retained earnings	830	820
Total stockholders’ equity	1,360	1,350
Total liabilities & stockholders’ equity	$ 2,000	$ 2,190

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$ 1,490
Cost of goods sold	940
Gross margin	550
Selling and administrative expense	455
Net operating income	95
Interest expense	20
Net income before taxes	75
Income taxes (30%)	23
Net income	$ 52

Dividends on common stock during Year 2 totaled $42 thousand. The market price of common stock at the end of Year 2 was $11.20 per share.

Required:

Compute the following for Year 2:

a. Gross margin percentage. (Round your answer to 1 decimal place.)

b. Earnings per share. (Round your answer to 2 decimal places.)

c. Price-earnings ratio. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

d. Dividend payout ratio. (Do not round intermediate calculations. Round your "Percentage" answer to 1 decimal place.)

e. Dividend yield ratio. (Round your "Percentage" answer to 2 decimal places.)

f. Return on total assets. (Do not round intermediate calculations. Round your "Percentage" answer to 2 decimal places.)

g. Return on equity. (Round your "Percentage" answer to 2 decimal places.)

h. Book value per share. (Round your answer to 2 decimal places.)

i. Working capital. (Input your answer in thousands of dollars.)

j. Current ratio. (Round your answer to 2 decimal places.)

k. Acid-test (quick) ratio. (Round your answer to 2 decimal places.)

l. Accounts receivable turnover. (Round your answer to 2 decimal places.)

m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

n. Inventory turnover. (Round your answer to 2 decimal places.)

o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

p. Times interest earned ratio. (Round your answer to 2 decimal places.)

q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)

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