Question

Using the following information find the ratios listed:

Hamilton Company
Comparative Balance Sheets
December 31, 2014 and December 31, 2015
Assets	2014	2015	Difference
Cash	15,000	47,000	32,000
Accounts Receivable	55,000	47,000	(8,000)
Inventory	110,000	144,000	34,000
Prepaid Expenses	5,000	1,000	(4,000)
Long term investments	127,000	115,000	(12,000)
Land	55,000	55,000	-
Building	450,000	660,000	210,000
Accumulated Depr - Building	(68,000)	(103,000)	(35,000)
Total Assets	749,000	966,000	217,000
Liabilities & Stockholder's Equity
Accounts Payable	43,000	50,000	7,000
Income Tax Payable	5,000	3,000	(2,000)
Accrued Liabilities	9,000	12,000	3,000
Bonds Payable	245,000	295,000	50,000
Common Stock $5 par value	200,000	276,000	76,000
Additional paid in capital	115,000	214,000	99,000
Retained Earnings	132,000	116,000	(16,000)
Total Liabilities & S/E	749,000	966,000	217,000

Sales	225,000
Cost of Goods Sold	120,000
Gross Profit	105,000
Operating Expense	70,000
Income before interest	35,000
Interest	12,000
Income before Taxes	23,000
Taxes	7,000
Net Income	16,000

Dividends Paid $13,800

Market price of stock $12

Find the following ratios for 2015:

1.   Current Ratio

2.   Quick Ratio

3.   Accounts Receivable Turnover

4.   Days to Collect

5.   Inventory Turnover

6.   Days on hand

7.   Payable Turnover  

8.   Days to pay  

9.   Debt to Equity Ratio

10. Number of times interest Earned

11. Profit Margin

12. Assets Turnover

13. Return on Assets

14. Return on Equity

15. Earnings per Share

16. Price/Earnings Ratio

17. Dividend Yield

Answer 1

Current asset = Cash +accounts receivable +Inventory +prepaid expense

2015 : 47000+47000+144000+1000

           = 239000

Current liabilities = Accounts payable + Income tax payable +Accrued liabilities

                = 50000+3000+12000

               =65000

	Formula	Calculation	2015
Current ratio	current asset /current liabilities		239000/65000 3.68
Quick ratio	[Current asset -inventory - prepaid expense]/current liability	[239000-144000-1000]/65000	94000/65000 1.45
Accounts Receivable Turnover	Sales /Average receivable	Average receivable : [Beginning+ ending ]/2 [55000+47000]/2 51000	225000/51000 4.41
Days to Collect	365/Accounts Receivable Turnover		365/4.41 82.77 days
Inventory Turnover	cost of goods sold /Average inventory`	Average inventory = [110000+144000]/2 127000	120000/127000 .94
Days on hand	365/ Days on hand		365/.94 388.30
Payable turnover	Purchase /Average accounts payable	Average accounts payable =[43000+50000]/2 46500	154000/46500 3.31
Days to pay	365/Payable turnover		365/3.31 110.27

**Purchase : cost of goods sold +ending inventory -beginning inventory

       = 120000+144000-110000

        = 154000