Question

Problem 14-3A a Condensed balance sheet and income statement data for Jergan Corporation are presented here....

Problem 14-3A a

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

Jergan Corporation
Balance Sheets
December 31

2020

2019

2018

Cash $ 30,500 $ 17,800 $ 17,700
Accounts receivable (net) 50,400 45,200 48,800
Other current assets 89,300 96,000 65,000
Investments 55,400 70,000 45,800
Plant and equipment (net) 499,100 369,200 358,400
$724,700 $598,200 $535,700
Current liabilities $85,200 $79,300 $70,600
Long-term debt 145,300 84,500 50,700
Common stock, $10 par 330,000 316,000 310,000
Retained earnings 164,200 118,400 104,400
$724,700 $598,200 $535,700

Jergan Corporation
Income Statement
For the Years Ended December 31

2020

2019

Sales revenue $736,500 $606,500
Less: Sales returns and allowances 39,400 29,300
Net sales 697,100 577,200
Cost of goods sold 427,200 373,000
Gross profit 269,900 204,200
Operating expenses (including income taxes) 179,277 152,252
Net income $ 90,623 $ 51,948


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%.)

(6) Payout ratio % %
(7) Debt to assets ratio % %
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