Question

KNOX INSTRUMENTS, INC.

BALANCE SHEETS

(THOUSANDS OF DOLLARS)

                                                                                                Dec. 31,           Dec. 31,

                                                Assets                                         1993                1992

Cash                                                                                        $   3,000        $   2,900

Accounts Receivable (Net)                                                        28,000          28,800

Inventory                                                                                   64,000          44,000

Plant Assets                                                                               76,000          67,300

Total Assets                                                                           $171,000       $143,000

  

Liabilities and Stockholder’s Equity

Current Liabilities                                                                   $ 45,200          $ 39,750

10% Bonds Payable                                                                   20,000             14,000

   Total Liabilities                                                                    $ 65,200          $ 53,750

Common Stock, $10 Par Value                                              $ 40,000          $ 30,000

Retained Earnings                                                                      65,800             59,250

     Total Stockholder’s Equity                                              $ 105,800         $ 89,250

Total Liabilities and Stockholders’ Equity                           $ 171,000         $143,000

REQUIRED

Using the given data, calculate items 1 through 9 for 1993.

Current ratio

Quick Ratio

Average collection period

Inventory turnover

Operating cash flow to current liabilities ratio

Debt-to-equity ratio

Return on assets

Return on common stockholders’ equity

Return on sales.

Calculate the dividends paid per share of common stock.(Use average number of shares outstanding during the year).What was the dividend pay-out ratio?

If the 1993 year-end price per share of common stock is $25, what is (1) the price-earnings ratio? (2) the dividend yield?

Answer 1

Current ratio		Current Assets / Current Liabilities	2.101769912
Quick Ratio		(Current Assets - Inventory) / Current Liabilities	0.685840708
Average collection period		365 / AR turnover	Requires Income Statement
Inventory turnover		COGS / Average Inventory	Requires Income Statement
Operating cash flow to current liabilities ratio		Operating Cashflow / Current Liabilities	Requires Cashflow statement / Income Statement
Debt-to-equity ratio		Total Liabilities / Total Equity	0.616257089
Return on assets		Net Income / Total Assets	Requires Income Statement
Return on common stockholders’ equity		Net Income /Total Equity	Requires Income Statement
Return on sales.		Net Income / Sales	Requires Income Statement